Does filing Chapter 7 bankruptcy end my problems with ChexSystems?

The simple answer: No.

ChexSystems is a reporting agency relied upon by financial institutions (banks and credit unions) to determine if you are worthy of opening an account. They provide information about individuals who may have mishandled or otherwise abused their check writing privileges at another bank (bounced checks, unpaid overdraft fees).

When applying for a bank account it is the first thing the bank’s customer service representative will check, and if your name shows up with a negative report more than likely you will not be able to open an account.

Here are some ChexSystems basics that all consumers should know, including those considering filing Chapter 7 bankruptcy.

ChexSystems is not a credit bureau, but a consumer reporting agency which governed by federal law (Fair Credit Reporting Act). The FCRA provides for protection against false or inaccurate information reported about you, so like a credit report you can get the information removed. Here is what a ChexSystems Report looks like.

 If a negative report shows up in ChexSystems, by law, that entry can remain on your report for 5 years. You can

Even if you bank account was paid in full after it was closed due to bouncing checks or unpaid overdraft fees, the bank or credit union is under no obligation to remove the negative entry. They are only required to now report that the over draft was paid in full. This will often make it easier to open another checking or savings account when you can show your new bank the overdraft fees have been paid.

After you receive your discharge in Chapter 7 or Chapter 13 bankruptcy, you unsecured debts will be eliminated, including any fees and overdraft charges to any financial institutions, so you have no obligation to repay these fees. However, that does not solve the problem the negative ChexSystems report will cause.

See these posts for additonal information on “fixing” ChexSystems problems after filing Chapter 7 bankruptcy.

Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our Fresno offices at: (559) 228-1500 or our Merced office at: (209) 722-3700 to schedule a consultation.