If I file bankruptcy, where can I bank?
If you are considering bankruptcy, you are advised to move any accounts you may have with Wells Fargo or Wachovia to another institution.
It doesn’t matter that you have never bounced a check and never borrowed any money from them. It doesn’t matter if you owe them money or not! If you file bankruptcy the corporate policy is to freeze your accounts. This policy continues today as litigation has resulted in a finding that this administrative freeze policy doesn’t violate the automatic stay.
Litigation continues but even if you have a corporate account it is wise to move your money. If the corporate account is linked in any manner to your personal account or social security number it will also be frozen.
How long will my account be frozen?
Likely, at least 30 days although it could only be a few days or a week. For at least some period of time, you will not have access to your money, your ATM card will not work and any checks that are outstanding will be returned. If you end up with bounced check charges and the aggravation of getting replacement payment to cover the check that will cause an even bigger mess. Eventually the account can be unfrozen but meanwhile you won’t be able to pay the mortgage or buy food.
What if I don’t file bankruptcy, can I keep my account then?
I had a client come in who had been with Wells Fargo. She mistakenly overdrew on her account by less than $15. She then lost her job and was unable to make any deposits for a while. After a few months that small original sum grew to almost $300! With her unemployment, she was not able to pay it off so she looked for an account somewhere else. She was refused a bank account at Bank of America and the local credit union because of the earlier overdraft at Wells Fargo. You want to bank at a smaller regional bank NOT one that is too big to fail.
Don’t forget – move your money from Wells Fargo (and Wachovia) to another bank or credit union before you file bankruptcy. Anywhere where you don’t have any loans, lines of credit or credit cards is fine. There are usually local banks that have free checking accounts with no monthly minimum balances to contend with. Better yet, look into a credit union account. These are member owned and usually have the best customer service.