Georgia Bankruptcy Filers of Chapter 7 or Chapter 13 Subject to Bank Account Taking
If you file Chapter 7 or Chapter 13 bankruptcy in Georgia, your bank account may be frozen if you have debt with that bank. Normally, creditors are not allowed to take payment or money from debtors who filed bankruptcy. However, pursuant to 11 U.S.C. Section 553 of the bankruptcy code, a bank has the right to “set-off” debt that you owe to it with funds that you keep in any account with the same bank.
In practical terms, this means that they can remove the funds from your personal account in order to pay your debt to them, regardless of whether or not you authorize them to do so. Normally, in a bankruptcy, the debtor’s assets are protected by a an automatic bankruptcy stay that goes into effect upon filing. The right of set-off is a legal exception to the stay therefore the bank’s action does not violate the stay.
So how can you protect your assets if you file? I recommend that clients who have credit cards or loans with the bank where they have their personal accounts set up a second account at a neutral bank before they file for bankruptcy. They can then transfer their money to the new account and keep no money in the bank where they also have a loan or credit cards. Automatic deposits, such as salary or paycheck deposits, should be transferred to the new bank as well. This legally removes the client’s assets from the reach of the bank.
As you can see, there are many considerations involved in the decision to file for bankruptcy. If you are making this decision please consult a qualified attorney. For a free consultation please contact The Law Offices of Charles Clapp at 404.585.0040 or email at firstname.lastname@example.org.
Charles is absolutely a brilliant attorney! He is a critical thinker and determined problem solver. He is very accessible, even via text. If he is in court, his ability to multi-task, you can feel safe and secure in knowing he is handling any issues or concerns. I entrust him with my future, he is a uniquely talented attorney who always challenges himself to achieve the absolute best outcome for his clients.
I was very satisfied with Mr. Clapp services. He is a man of his word and did everything he told me he would. I would highly recommend him.
I came to Mr. Clapp by referral with a complicated case involving both personal and business debts that were out of control. Mr. Clapp evaluated the situation and gave me options that I was not even aware of. He knows his stuff, executed flawlessly, and I have been able to start over. I highly recommend Charles Clapp if you have debt or bankruptcy issues. Listen to his advice, he knows his stuff. I consulted with several other bankruptcy attorneys prior to retaining Mr. Clapp, and they did not have the same breadth of knowledge that Mr. Clapp brought to my case.
I selected Charles Clapp to handle my bankruptcy based on his already positive reviews and I am glad that I did! He was very accommodating to my schedule and made my negative life experience positive. I was actually very surprised how easy he made the process. Life happens and it’s great to be represented by someone that understand that!!! Stop your attorney search with Charles Clapp!!!