Recent Posts in Bank Accounts Category

As you may have heard there are several new credit card regulations. One such regulation prohibits banks from charging over draft fees unless you “opt in.”

If you chose not to “opt in” to the service your credit card or debit card transactions will be declined if they exceed your limit or would over draw your bank account. However you cannot be charged an over draft fees.

Before this change banks allowed most customers to over draw their accounts or exceed their credit limit and then charge fees for exceeding the limit.

Banks will no longer be able to do this UNLESS you tell them it is okay to allow you to over draft your account and to charge you over draft fees. Some banks are currently undertaking marketing campaigns to convince customers to opt into over draft fees.

Banks make a lot of profit on over draft fees and they do not want to lose them.

It’s up to you to opt in or not but it will cost you if you do. In my humble opinion, do not opt in save your money and do not pay banks extra fees.

Leave it there.

An individual filing a chapter 7 bankruptcy case you may be able to exempt up to $11,200 ($22,400 for a married couple) of cash and bank deposits.

If the money is exempt it will not be touched by the bankruptcy court, trustee, or your creditors. Simply put you can keep.

If you are filing a chapter 13 case there is no liquidation of your assets, unless you want there to be, so here again you can keep the money in your bank.

If you have cash and bank deposits that exceed the exemptions, fear not, you may be able to protect some of the non-exempt money by placing it into an IRA or putting a new roof on your home. I strongly encourage you to meet with a lawyer prior to planning any exemption.

This is called “Setoff.”  A bank has the right to “setoff” one account against another. For example if you have a loan and a checking account (or other account with money on deposit) at the same bank and you stop paying the loan the bank may pay the loan by taking the money out of your checking account. The bank does not have to tell you in advance of doing this.

What to do? How to avoid setoff?

If you are falling behind on loan payments and have a bank account at the same bank. Then simply withdraw your money from the banking account and go to a new bank. Since there is no money in your banking account there can be no setoff.