Close out wells fargo Bank Accounts before filing Bankruptcy

I was just reminded the other day by a client that had his Wells Fargo account frozen upon his filing the need to close out Wachovia or Wells Fargo accounts before you file. While it doesn’t affect your ability to keep your money typically, it can be a real pain and put you in a predicament if bills are due and you don’t have incoming money. Wells Fargo for some reason feels like they need to act a trustee for your bank accounts upon the filing of a bankruptcy. Credit unions can do this as well, and I have heard of Union Bank doing the same thing. It ties your money up until the trustee signs off that they were exempt funds. This can take a few days to up to 3 weeks so if you are filing and you have an active account with Wells Fargo take your money out and put them in a different bank account. I typically let my clients know that if you owe money to a bank that you have money in such as credit union credit card and credit union bank account they can set off the funds you owe them with the funds in your account. I always look for accounts owed and bank accounts with the same institution. The client I forgot to warn about as we did the petition really quickly to stop a wage garnishment only owed money to AMEX and I forgot that Wells in notorious for freezing accounts. Fortunately the money is exempt and he’s paid in two days(new money that comes in is not frozen). We will have to have the trustee sign off that the money is exempt and he’ll have it back within a week or so, but heed this warning that Wells Fargo will freeze your account upon the filing of a chapter 7 petition.

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

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