Banks typically do not freeze the bank account of a customer filing a New Jersey bankruptcy. However, they can. A bank may freeze your account just as soon as it learns that you have filed for bankruptcy. It will say that it is doing so to preserve the ability of your creditors to recover against those funds. However, in most cases, your modest bank account should be exempt from your creditors. If a bank does freeze your account, your New Jersey bankruptcy attorney can contact the bank or the bankruptcy trustee to lift the freeze.
If you owe the bank money, then the bank can freeze the account under the concept of offset. This means that the bank has the right to offset your funds against any debt that you owe to the bank. This is why you should have your account at a different bank than where you owe your car payment. Or switch that account prior to filing bankruptcy to avoid the offset.
If you have automatic payments coming out of your account, it is imperative to stop those payments before your bankruptcy petition is filed so that your account is not charged in the meantime. An exception is if you have a car loan and want to keep the car in bankruptcy. In that case, you don’t want to miss a payment.
Pre-planning with an experienced New Jersey bankruptcy attorney is key. Call us today for a free consultation.