Opening A New Bank Account After Filing For Bankruptcy

Posted by Banks on June 28, 2011 · Leave a Comment

Opening A New Bank Account After Filing For Bankruptcy

A bankruptcy is, by all accounts, a traumatic experience: in most cases you lose a good chunk of your assets, your credit is ruined, and it stays on your report for the next ten years. But that doesn’t mean that you can’t rebuild your financial credibility. After all, companies do it all the time. You just have to be in the right mindset, and look in the right places for resources that are available to you

Fresh Start Checking Accounts

Once you have come out of bankruptcy, you will be able to open new bank accounts. Actually, this is the first thing you should be doing, since as a standard procedure, your bank accounts will be closed when you file for bankruptcy. Once the bankruptcy has been filed and a person’s debts have been charged off, you need to immediately starting to rebuild your credit. A bank account is going to be the first thing you need.

Bank Account After Bankruptcy

The first thing that we want to point out to those asking “can I get a bank account after bankruptcy” is this: a checking account has nothing to do with a bankruptcy unless when you filed for bankruptcy, you included some current bank account you had. When you do this, the bank will place an inquiry on ChexSystems and that is what banks use to determine if they will grant you a bank account at their branch.

Now if you have included one or more bank accounts in your filing, don’t despair. Getting a new bank account after bankruptcy is not the easiest thing to do, but it is not impossible if you have a plan. Here’s how you should go about it.

Look for banks that don’t check with Chexsystems when opening new accounts, or that check it but don’t necessarily reject you if you have a negative entry. You’ll find that the big boys like Chase or Bank of America won’t really work to accommodate you. You’re much better off looking online or in your community’s smaller regional banks where it’s more likely that someone has the option of overriding a ChexSystems report.
Speaking of negative Chexsystems entries, it would be best if you could get rid of those. Chexsystems will typically not respond to a removal request unless it comes from a bank, so you should get your Chexsystems report and contact those institutions with which you have outstanding unpaid balances. Work something out with them, with the agreement that once the debt is paid off, they will write to get you out of Chexsystems’ database. Get that agreement in writing. If this can’t be done, have them at least give you an official note stating that the debt has beenpaid off.
If the unpaid account balance was pre-petition (before the filing of bankruptcy) and properly listed in the case, then there is a simple fix. Get a copy of the Notice of Bankruptcy and send it with a cover letter to Chex Systems. If a debt is discharged in bankruptcy, that account must be reported as “$0.00 owed, discharged in bankruptcy.” Bankruptcy should not prevent you from opening a bank account.
Open a savings account. There is no issuing checks, so you might have a better chance of being approved for one. It also makes it easier to open a checking account in the future. Actually, if you have a little money available, it’s even better to open a Certificate of Deposit (CD) and offer it as a collateral for any negaative balance on your checking account. This is the ultimate show of good will and will greatly reduce a bank’s reluctance to do business with you.
Enroll in a consumer credit course. Some banks will view this as a positive step in the right direction if you have done this already prior to trying to open your checking account. These classes teach you how to maintain and manage a checking account properly which banks are well aware of.

By following the above steps, it is not uncommon to get a new bank account within 60 days after a bankruptcy discharge.