It’s common to worry about what will happen to your bank account if you’re planning to file for bankruptcy in Georgia. The good news is that bank accounts often remain unaffected by Chapter 7 bankruptcy filings.

An asset that is stated on your bankruptcy paperwork is your bank account. You must list each bank account separately if you have more than one (such as a checking and a savings account). The worth is determined by the amount of money in the account at the time the case is filed. The fact that this balance is not updated for pending transactions or past-due checks is very crucial to understand.

Is There a Maximum Amount You’re Allowed to Have in Your Bank Account in Georgia?

Yes. Your claimed bankruptcy exemptions determine the maximum. Account balances are protected by unique exemption regulations. You can better comprehend Georgia’s laws by speaking with a bankruptcy lawyer. The most crucial item to look at is how much of the balance in your bank account it shields. There is usually some sort of restriction.

In general, you can use a wildcard exception to cover cash on hand as well as money in your bank account. Using a wildcard exemption can be confusing, so it’s important to understand where and how you’re using it.

If the amount in your account exceeds the amount eligible for the exemption, consider your options. This does happen, particularly if you file on payday. Timing is crucial if it only involves accounts with varying balances based on your pay cycle. If you recently received a paycheck, buy groceries, pay your rent or utility bills, and fill up your gas tank. Most likely, that is all it will take to bring you below the limit.

If your account has a negative balance, you need to discuss your goals for that account with your attorney. If you’re keeping it, you’ll need to get your account back to a positive balance after you file for bankruptcy in Georgia.

Something to note, just like any other unsecured obligation, the negative balance may be dismissed. Depending on how much you owe, it could be better to register a new account and start over.

 

What Are the Bankruptcy Rules for Joint Checking Accounts in Georgia?

Just like other jointly owned accounts or loans, you must be sure to note on your bankruptcy filings if you have a bank account with someone who is not your spouse.

Everything will remain mostly the same if it is your primary account and you are able to request an exemption to protect the entire amount. Before filing your complaint, it could be a good idea to remove yourself from any joint checking accounts. If you do this, be careful to include this information in your Statement of Financial Affairs. You might also be required to provide the trustee proof that you didn’t make any deposits into the account in the months before filing.

Georgia legislation determines whether the trustee has any authority over the account if you are still a joint account holder when your case is filed. Make sure to speak with a bankruptcy attorney to figure out how to manage this before your case is filed. If you’re on a parent’s or other relative’s primary checking or savings account, you don’t want your filing to affect their account status. You also don’t want it to seem as if you’re hiding things.

 

Can You Open a Checking Account After Filing Chapter 7?

There is nothing that prevents you. Given that the bank is aware that your debts were discharged, getting one can be simpler than it might have been previously. The best route for some people to rejoin the banking system is through bankruptcy.

 

What Are Assets Exempted When You File for Bankruptcy in Georgia?

Laws that specify which property you can remove from bankruptcy are known as bankruptcy exemptions. You may keep the property in a Chapter 7 bankruptcy if it is exempt.

Your eligibility for certain exemptions is based on state regulations. There are several exemptions in each state. You can typically choose between using state exemptions or federal bankruptcy exemptions in some states. Discuss this situation with your attorney to see what is best for you and what you’re able to do.

There are no automatic exemptions. You will list the assets you are claiming as exempt in your bankruptcy schedules.

 

Exempting Funds from Checking Accounts

The trustee assigned to your bankruptcy case won’t be able to use the money in your account to pay creditors if you are successful in claiming the monies in your checking account as exempt.

The majority of states do not provide an exemption for cash or even funds in a checking account. In addition, the amount is sometimes insignificant in those states that do. It’s typical for a cash exemption to be a small amount, such as a few hundred dollars. To safeguard part of your money, you might be able to use another exception, nevertheless.

You might be able to protect money in your bank account by using some popular exclusions, which are listed below.

• Your cash on hand is yours to keep
• Your wages will not be taken from you
• Social Security and other government assistance
• Money linked to a pension or retirement
• Spousal or child support money you receive

 

When Funds in an Account Are Not Exempt or Only Partially Exempt in Georgia

When you file for bankruptcy in Georgia, any non-exempt funds that are present in your checking account will be forfeited. Funds that are not exempt must be given to the bankruptcy trustee. The trustee will use this cash to pay off your creditors after that. Before filing, talk with your bankruptcy attorney to see what your options are.

Exempt and non-exempt can be overwhelming to understand. There is a reason you have an attorney on your side to help you through this matter. It’s important to talk with your attorney openly about this so they can assist you in the right direction. If they don’t know what you need, they can’t help you.

Some banks will immediately freeze your account after learning of the bankruptcy. They do this to safeguard the assets of creditors. They are not supposed to do this, but there are banks that take the step anyway. Most of the time, the bankruptcy trustee can be asked by you or your lawyer to get in touch with the bank and lift the freeze. If you are qualified to receive the monies, the trustee will probably do so.

The trustee will check your bank account balance on the day you file for bankruptcy in Georgia. Don’t expect the trustee to be understanding if the balance is higher than you anticipated as a result of several of your checks failing to clear. Any percentage that is non-exempt, you must turn over. It’s important to make sure all transactions are cleared before filing. If they have not, make a backup plan for those transactions.

If a company declares bankruptcy, the trustee may speak with the bank directly to shut the account. However, if you are an individual declaring bankruptcy, you will likely just need to pay the trustee the amount of the account’s non-exempt funds.

 

What if I Have More Money In My Bank Account Than I Can Spend on Needs and This Month’s Payments Combined?

In that scenario, begin by posing these two questions to yourself:

Do I qualify for the entire amount?

You might not need to worry about depleting the funds because the federal bankruptcy exemptions contain a sizable wildcard.

What is the money’s source?

Depending on where it comes from, some money is protected. One illustration is social security benefits. These monies are safeguarded separately as long as they aren’t combined with other funds. Because of this, having a separate account where just social security benefits are deposited is always a good idea.

The best course of action is to spend the money on permitted things before filing your lawsuit if your funds are not safeguarded. If not, the bankruptcy trustee will request the non-exempt sum so that it can be utilized to settle your debts with your creditors. Even if you have to use the money for bills and other necessities after filing, they’ll still ask for it.

 

What may I buy with the money that is allowed?

That might be a little challenging. To help you through the confusion, talk with your bankruptcy attorney. You should avoid using the funds to make restitution to family or friends. It is possible the trustee will demand you pay back this money.

 

Paying Your Bank Money: Credit Card Balances

Your bank may be able to hold the obligation if you owe money to the same institution that holds your accounts, such as if you have a credit card outstanding with that institution. If you file for bankruptcy, your bank might utilize the money in your account to settle your credit card debt.

There is bank set-off legislation in every state. It’s usually best to keep your checking account with a bank other than the one to whom you owe money if you think you might need to file for bankruptcy in Georgia. You can typically keep your checking account even after filing for bankruptcy.

 

Too Deep in Debt to See a Way out? Call a Georgia Bankruptcy Attorney Today

Your bankruptcy filing has no impact on any funds in your account that are exemption-protected. As part of their examination of your case, your case trustee might need to examine certain bank account statements, but they won’t call your bank; instead, they’ll rely on you to supply them. In other words, they could not even learn about your filing until much later if you don’t have any loans or credit cards with the same bank.

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