What Happens To My Bank Accounts During Bankruptcy

What is going to happen to my bank accounts during bankruptcy? Would I be able to open a new bank account while being bankrupt? How long it will take me open a new bank account after the discharge of bankruptcy? These are some of the most common questions related to the bankruptcy and bank accounts. However, as you may notice for yourself the focus of these questions is on the bank accounts themselves. The right approach would have to include the examination of the time dimension of bank accounts and bankruptcy. Your bank accounts are going through the series of changes along with development of the bankruptcy process.

Before the bankruptcy your bank accounts are fully operational and correspond to your general financial situation. As soon as the bankruptcy occurs they can be limited or closed if there was debt on that bank account. One thing is sure, they will never be the same even if some of them survive the bankruptcy. Therefore, the focus of your attention is to be oriented toward the new bank accounts in both situations during and after bankruptcy. Now, we are asking the right question: How to open and manage a new bank account for the time of bankruptcy and after it?

New Bank Accounts During Bankruptcy

It is more than reasonable to expect that at some point during the process of bankruptcy you will be in need of new operational bank accounts in order to function normally as much as possible. Unfortunately, with previous bank accounts frozen or limited and financial reputation shaken this can be a very difficult task. On the other side, we have to say that there are certain options, although very limited, which can be used by people influenced by bankruptcy.

The first option, or better to say an alternative, when it comes to the new bank account in bankruptcy is a prepaid card. One of the widely used in this case is for example MasterCard cashplus prepaid card. It is not the same as the bank account, although it can successfully change and support some of the bank account’s functions. In addition, it is accepted without credit checks and it can be used without supportive bank accounts including the very important possibility for you to get payments on this card. The next option you can use while bankrupt is a guaranteed bank account. As expected this type of bank account comes with both things you may not find to be supportive of your current situation: high price and appropriate guarantee. There is one more option for you on your long walk on the bankruptcy avenue where you look for a suitable bank account or something with similar functions. Basic and free bank accounts are also one of the options for you, regardless of what you may think of them. In this scenario you will not be asked about your poor credit history and bankruptcy, while on the other side you cannot expect from this type of accounts some credit features. The post office account is definitely your last option while bankrupt. The only benefit is to see the financial circulation on this type of account.

New Bank Accounts After Bankruptcy

The long anticipated day has finally arrived, you are discharged from bankruptcy and you simply cannot wait to dive into the financial waters of normal monetary functioning. However, the new situation which awaits may have serious demoralizing effects on you. The new bank accounts in your post-bankruptcy life will be more expensive and with possible limitations compared to the ones you had before the bankruptcy. The reason for this new situation for you are not the changes on the financial market which influenced the price of banking services, but your own financial reputation which went through serious modifications. The sooner you accept this fact, the better for you and your new plans.

On the other side, as we have seen in the previous period during the bankruptcy there is a same rule which can be applied here with equal success – for every customer there is an appropriate market. Your case is not isolated and there will be always certain individuals or institutions for providing the financial services to the people with bankruptcy history, especially in these times of economic crisis. Their interest in potential profit can easily prevail your compromised financial history. In this type of situations, both parties can have interests to proceed in maintaining the newly open bank account. In a certain way, you should learn a lot from your own bank accounts during and after bankruptcy. They can demonstrate to you in the best possible way how to adapt, change and eventually to survive the bankruptcy. The show must go on rule finds it’s the most fruitful ground among the bank accounts with bankruptcy experience.

Andy Gorton is the author and editor of the Bankruptcy Clinic

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.

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