BEWARE: Wachovia/Wells Fargo Will Take Your Money If You File Chapter 7 Bankruptcy!

If you are considering filing Bankruptcy in Florida, and you file a Chapter 7 Bankruptcy Petition, you should be aware that if you bank at Wachovia Bank, which is now owned and controlled by Wells Fargo Bank, NA, they will place a hold on your checking accounts, savings accounts, certificates of deposits, or any other funds which you have in your bank account with them.  It seems that Wachovia and Wells Fargo are the only banks taking this drastic measure to seize the funds held by Chapter 7 Bankruptcy debtors for now.  

And, unfortunately, it is legal!  

When you file for Chapter 7 Bankruptcy, you in essence surrender all of your property, including money in your bank accounts to the Trustee.  Although, in most cases, the funds in checking and savings accounts can be "exempted out" and debtors may not have to actually surrender or turn over the money to the Chapter 7 Bankruptcy Trustee appointed to their case, the bank has the authority based on a recent decision of the Court in the Bankruptcy Court for the Middle District of Florida, Tampa Division, to place a hold on the funds in the account pending directions from the Chapter 7 Trustee.

What Does This Mean For You?

If you bank with Wachovia Bank/Wells Fargo Bank, and you file Chapter 7 Bankruptcy, the money in your checking and savings accounts will be placed on hold.  You will not have access to pay your bills such as mortgage payment, your rent, your utility bills, your grocery bills, your medical bills, or use of the money for any purpose whatsoever.  If you have written checks against the funds in the account, they will not be honored by Wachovia Bank/Wells Fargo Bank while you are in Chapter 7 Bankruptcy until the Trustee advises the bank the funds can be released.  And what happens if you have written checks and they are not honored by the bank, then you face fines and penalties from the bank who will take your money to pay the fines and penalties once the funds are released by the Chapter 7 Bankruptcy Trustee.  You will also face the very real possibility of late charges from your mortgage lender, landlord, utility company; or worse, you will not be permitted to write checks to your physicians, grocery store, pharmacy, etc.  This also applies if you, like most Americans, use your debit card, instead of writing checks.  the debit card will not be honored.

My Advice to You?

If you are considering filing Chapter 7 Bankruptcy in Florida, then close your account with Wachovia Bank/Wells Fargo Bank and move your money to another banking institution which is not taking these drastic seizure actions against Debtors.  Although it is legal it can be very inconveniencing and troubling when you find yourself unable to buy groceries, medicine or pay your electric bill or rent. This is especially true if you have direct deposit form your employer - you will not have access to your paycheck if it is deposited into your account at Wachovia/Wells Fargo Bank.  Of course, if you do close your account, you will need to disclose this information on your Statement of Financial Affairs in your Bankruptcy Petition.

If you are considering filing Chapter 7 Bankruptcy in Florida, or in the Orlando area, you should seek the advice of an experienced bankruptcy attorney.  If you need help and are considering bankruptcy, contact the Cressman Law Firm today for your free no obligation consultation.  Or email me at mark@cressmanlaw.com to have your questions answered. 

Life After Bankruptcy, How Do I Start

Once Bankruptcy Case in Florida was discharged, you most likely asked yourself, where do I go from here? Will I ever be able to purchase a new home? A new car? Eventually you will be able to buy a new home, or new car. In some cases in may take more time than in others. Relax it will get easier for you. However, do not fall into the trap that led you to our office in the first place. Remember, the credit card companies will be happy to provide you with a credit card and hope you get into to trouble again. You can only file Chapter 7 Bankruptcy relief once every 8 years. So be careful how you spend your money.

As we talked about in the office, learn to live off 70% of your income and begin saving the other 30% of your income for an emergency. Now you will likely be free of most of your debtsand you'll have the opportunity to get a fresh financial start. Your goal must be to overcome and the challenge of rebuilding your credit and establishing new financial goals. When you emergefrom bankruptcy, you will probably be left with few or no credit cards. Many of your sources of credit will be gone, and you will have a challenge to maintain your commitment to financial well-being. Set up an emergency fund. An emergency fund is a reserve of ready cash that you will use to cover emergency expenses while you are back on your feet after filing bankruptcy. Typically, you should place three months’ worth of your average monthly expenses in your emergency fund.

You may well wonder how you're going to find the funds to start an emergency fund when you're just getting out of bankruptcy. Many people are forced into bankruptcy court because they areunable to control their spending. For example, instead of saving small amounts of money every week, they buy expensive gourmet coffee, go out for lunch every day, or put money in the weekly lottery. Although these types of expenses may be small individually, when totaled up over a year, they can run into the thousands of dollars. For example, do you play the lottery? Do you religiously plunk down 10 or 20 dollars every week on your favorite numbers with thethought that you'll never really miss those 20 bucks if you lose, and that if you win, all of your troubles will be over? Leaving aside the almost overwhelming odds against you that you will ever win a significant amount of money in a lottery (according to most experts, you're more likely to be struck by lightning than to win the lottery), you should think about how your money would grow, if instead of spending it on the lottery, you deposited it in an investment account.

Meanwhile, during the first three months of your non-lottery existence, you will have saved $260 for your emergency fund. This sacrifice may only be temporary, but the peace of mind you will gain will have long-lasting effects on your financial outlook.

You will need the disciplined enough to not spend the money until you have a REAL emergency. If no emergency arises, you'll have a nice source of savings for that rainy day down the road.Once you build up about three months of expenses for your emergency fund, congratulate yourself. Not only have you established an important cash reserve for emergencies, you will also have proved to yourself that you can control your spending and save money – two very important skills for your life after filing bankruptcy.