Just because you file a Chapter 13 or a Chapter 7 bankruptcy does not mean that you can’t have a bank account in Georgia. However, if you have no bank account at all before your case is filed, it is possible that you may have difficulty opening a new one after bankruptcy. When you file, your case is a matter of public record. Banks can check to see if you have filed bankruptcy before they allow you to open an account with their institution.
If you have a checking account with a bank that you owe money for a loan, credit card or any other type of debt, I would recommend that you close that account and open a new one with an institution that you don’t owe any money to before you file. Under Georgia law, a bank has a right to setoff. This means that if you have $100 in an account with Rome GA Bank, that bank can take your $100 as soon as you file a bankruptcy if you owe Rome GA Bank any money. If money has been seized through this type of setoff after the bankruptcy case is filed, we cannot get the money back after you file your case. The money is gone.
If you decide to open a new bank account before you file, make sure you don’t forget to change any direct deposit orders as well. Nothing is worse than having your entire paycheck seized by a creditor bank because you forgot to change the order. Get some type of confirmation from your payroll department that the change order has been received and processed.
I recently met with a client in my Dalton office who works for a large carpet company. My client completely forgot to close her bank account and open another one with a bank that she owed no money. After we filed the case, her paycheck was directly deposited into her bank account. Since she had a credit card with this same bank, they seized a good chunk of money. Don’t let this happen to you. Plan carefully before you file.