Accounts with Credit Unions & Wells Fargo

Special instructions for credit union and Wells Fargo Bank accounts before you file your bankruptcy case

If you owe a debt to the same credit union you have a checking or savings account with, you should take out all your available funds in those accounts before you file your bankruptcy case.  Otherwise, the credit union will take the money in your account and apply it to your loan balance right after you file your bankruptcy.  This could cause your checks to bounce and create a serious financial problem for you.  Similarly, if your paycheck is automatically deposited into a credit union to whom you owe a debt, you should try to time the filing of your bankruptcy case so that the paycheck deposit will not be made into the credit union just before you file your bankruptcy case.  If the deposit is made just before the bankruptcy case is filed, you may not be able to get the money out in time to stop the credit union from seizing it. Usually this problem only occurs with credit unions.

Wells Fargo Bank, however, has created a slightly different problem over the last few years.  In Chapter 7 cases (this does not happen in Chapter 13 cases), Wells Fargo Bank frequently freezes bank accounts of people who file bankruptcy, even if the account is properly listed and protected (exempted) in their bankruptcy papers.  Wells Fargo freezes the money even if the person does not owe Wells Fargo any money at all! Wells Fargo claims they are protecting the rights of the Chapter 7 bankruptcy trustee, although this does not make much sense.  Therefore, if you have a bank account at Wells Fargo and you are planning to file a Chapter 7 case, you should take your money out of Wells Fargo before you file your bankruptcy case.  Of course, you will list this money in your bankruptcy case, even if you have it in cash at the time of filing your bankruptcy.  You always need to list all of your assets in your bankruptcy papers!