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Can I Close My Deposit Account Before Bankruptcy If My Bank Is One Of My Creditors?

Yes, it’s a common tactic to change banks ahead of a bankruptcy filing.

If you have a mortgage, car loan, credit card, or other debt owed to the bank where your checking and savings accounts are located, you run the risk of having the account frozen so the bank can protect the debt you owe it.

This is called a set-off, and it isn’t covered by the automatic stay that protects you from collections actions.

It may be that the cash in the account is exempt and you’ll eventually get some or all of it back, but the time between a freeze being implemented and a freeze being lifted can be crushing for people who’ve been struggling to stay solvent.

At Zelenitz, Shapiro & D’Agostino, we can help you understand how bankruptcy will impact your specific financial arrangements, and take precautions to protect yourself before you file.

Call us today at 718-599-1111 and talk to a Queens bankruptcy lawyer for free.