What Happens to Your Bank Account When You File Chapter 13?
Curious about what happens to your bank account when you file for Chapter 13 bankruptcy? Acclaim Legal Services provides straightforward answers and expert guidance on managing your finances during bankruptcy.
Schedule a ConsultationIf you're considering filing for Chapter 13 bankruptcy, it's natural to have questions about how it will impact your finances, particularly your bank account. At Acclaim Legal Services, we understand the importance of transparency and providing accurate information to our clients. In this article, we'll explain what happens to your bank account when you file a Chapter 13, ensuring you clearly understand the process and how it affects your financial situation.
Maintaining Your Bank Account During Chapter 13 Bankruptcy
When you file for Chapter 13 bankruptcy, you can continue using your existing bank accounts. Closing or changing your bank account is not required as part of the bankruptcy process. Your bank account will generally remain unaffected by the filing, allowing you to manage your daily finances as usual. Credit Unions, under Michigan Law, do have a one-time right to set-off whatever funds are on deposit in your account on the date of the filing. It is important to make sure no funds are on deposit in your accounts with a credit union, if you have debts with the credit union (i.e. credit card debt, personal loans, and even vehicle loans).
Automatic Stay Protection
One of the primary benefits of filing for Chapter 13 bankruptcy is the automatic stay protection it provides. The automatic stay is a court order that goes into effect immediately upon filing for bankruptcy, halting most collection actions against you, including freezing bank account levies and garnishments. This protection allows you to reorganize your debts and create a manageable repayment plan while controlling your bank account.
Working with the Chapter 13 Trustee
Upon filing for Chapter 13 bankruptcy, a trustee will be assigned to your case. The trustee oversees your repayment plan and ensures its fairness to you and your creditors. As part of this process, you must make regular payments to the trustee, who will then distribute the funds to your creditors according to the approved plan. These payments can typically be made electronically from your bank account.
Monitoring Your Bank Account Activity
It is crucial to closely monitor your bank account activity during Chapter 13 bankruptcy. Your trustee may review your bank statements periodically to ensure that you comply with the terms of your repayment plan. Any significant changes or unexpected transactions should be promptly reported to your attorney and the trustee.
Bank Account Exemptions
Certain funds in your bank account may be exempt from the bankruptcy estate, meaning they cannot be seized to repay your creditors. Exemptions vary by state, but common exemptions may include Social Security benefits, disability payments, unemployment benefits, child support, and other forms of public assistance. Your bankruptcy attorney will help you identify and protect eligible exemptions to preserve your essential funds.
Consulting with a Bankruptcy Attorney
Navigating the complexities of bankruptcy can be overwhelming, but you don't have to face it alone. Acclaim Legal Services has a team of experienced bankruptcy attorneys specializing in Chapter 13 bankruptcy. Our knowledgeable attorneys will guide you through the process, answer your questions, and ensure that you thoroughly understand how Chapter 13 will impact your bank account and overall financial situation.
Contact Acclaim Legal Services Today
If you're considering filing for Chapter 13 bankruptcy or have questions about your bank account during bankruptcy, don't hesitate to contact us at Acclaim Legal Services. Our compassionate team is here to provide personalized guidance and help you achieve financial freedom. Contact us today to schedule a free consultation and take the first step toward a brighter financial future.
Schedule a free consultation with the experienced bankruptcy attorneys at Acclaim Legal Services today. Let us help you navigate the complexities of bankruptcy and guide you toward a fresh start.
My overall experience with Acclaim Legal Services has been excellent. They created a workable budget for me while allowing me to reduce my debt. They were very prompt and helpful when I had questions or concerns. They helped me modify my home mortgage so that…
We can’t thank you enough for your help over the past 3 years. Your professionalism and patience speaks volumes about you!
It has been a pleasure working with you and Atty Chris Jones. Thank you very much for all your help and guidance. God bless you all. Thumbs up for your services.
I greatly appreciate the excellent job done by Attorney Chris Jones together with Cindy Millns upon the completion of my Chapter 13. They are very prompt and thorough in helping me resolved my 2nd mortgage, credits, helped me make a realistic budget all thru…