If you are considering declaring bankruptcy in Sacramento, chances are you are at least somewhat concerned with keeping your assets safe. Most people are primarily worried about their houses or cars, but what about your bank accounts?
Unfortunately banks can and will freeze bankruptcy filers accounts. Wells Fargo in particular has a very aggressive policy. The banking goliath has made it very well known in the bankruptcy community that when it comes to bankruptcy, their clients are their least concern. You may think that this won’t happen to you, but the policy is nationwide. The bank uses a program to cross reference each day’s bankruptcy filers with their account holders and subsequently freeze any account containing over $5,000. Even accounts with less money in them are at risk.
Once the account is frozen, Wells Fargo will only release the funds at the bankruptcy trustee’s request. Generally speaking, most trustees will want to wait at least until the Meeting of Creditors has concluded before considering such request. Even if the trustee is sympathetic, debtors will still be unable to access their accounts for at least one month, if not longer. This can be devastating when your bills come due, especially if you are already struggling to stay current on mortgage and car payments, not to mention everyday expenses like gas and groceries.
Some debtors have tried fighting against Wells Fargo’s policy in court. However, the Ninth Circuit Court of Appeals has consistently favored Wells Fargo and have continued to validate the bank’s hold on any debtor’s funds. While I do not agree with this policy, it is the law here in California.
As a Sacramento Bankruptcy Attorney, I strongly recommend that you avoid Wells Fargo altogether. Before filing bankruptcy, consider closing out any Wells Fargo accounts and switching to a different bank. Generally, small local banks and credit unions are much more lenient towards bankruptcy filers and consumers in general. Remember, Wells Fargo and Bankruptcy aren’t a good mix.
