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.