5 Things You Need To Know About Creditors Freezing Your Accounts in a Chapter 7 Las Vegas Bankruptcy

The situation goes like this: You gather your documents, fill out the paperwork, file for bankruptcy, and then you find that a bank to which you owe no money has frozen one of your accounts. This is a baffling situation. The bank has no claim against your assets, and the automatic stay should protect you from this kind of behavior. This can be exceptionally bad because you still need the money. Here’s how this happened.
  1. Banks are legally allowed to hold your funds for the Las Vegas Bankruptcy Trustee. It is not allowed to seize the funds, just hold them as a custodian.
  2. After several weeks or even months, the Bankruptcy Trustee decides to abandon the accounts back to you.
  3. Only funds that were in the account on the day you filed will be frozen. Any money you add after that will be freely accessible, but at that point you probably won’t want to use that account.
  4. Fortunately, only a few banks do this, so most debtors don’t have to worry about scurrying to clean out their accounts at the last minute. Wells Fargo is known to do this, so be especially wary if you keep your money with them.
  5. This happens most often to people who file their own bankruptcy petitions and to those who hire inexperienced attorneys.
What do you do to prevent this? Don’t represent yourself in your Las Vegas bankruptcy, and if you do, hire a lawyer, and make sure he or she has solid experience to prevent this kind of hassle from happening to you. Creditors know all kinds of tricks that you don’t, and even banks that have no stake in your bankruptcy can disrupt your plans, making it difficult to make payments on a mortgage or rent and to purchase necessary items you may need. Your bankruptcy lawyer will also know how to help you with other unforeseen situations like this.
For example, what if your salary is directly deposited into a bank account? Can you switch the receiving account to a safer one? These are the exact kinds of reasons not to file on your own.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation by calling us at 702-880-5554.

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