“Help, I Can’t Open a Checking or Saving Account, because I’m in CHEX SYSTEMS”
Filing bankruptcy does not automatically prohibit you from opening a new checking or savings account. What will stop you dead in your tracks is your name appearing in CHEX Systems.
Bankruptcy only removes (discharges) debt which includes money owed to banks in the form of bounced check fees or checks that were honored by the bank when you had non-sufficient funds, bank service charges or ATM fees
Bankruptcy can not erase negative entries into CHEX Systems.
If you are reading this paragraph you probably already know that having your name in this system is worse than a bad credit score.
When your bank account application was turned down by the bank or credit union maybe you were not told of what or who CHEX Systems is or even identified them as the third party reporting agency that now prohibits you from participating in the most basic of financial institutions (having a checking or savings account).
If you are in CHEX Systems it means you are probably black balled from opening a checking or saving account with a new bank. When you go into a bank or credit union and ask to open an account the friendly bank representative will ask for you name, address and social security number. He or she will enter this information into the bank’s computer which will connect with a company called CHEX Systems, and if your name appears, you will be politely asked to leave the bank.
What is CHEX Systems? They are a third party reporting company that screens potential account holder’s bank history and if you have had numerous bad checks, overdrafts and unsatisfied checks, your name (which is tied to your social security number) will be flagged and you may not be allowed to open an account with that bank. This issue a report to subscribing banks similar to a credit report.
CHEX Systems does not make the decision about whether you can open a bank account, they only make the report; nor can CHEX Systems make a recommendation to deny you an account.
CHEX Systems is a consumer reporting agency government by the Fair Credit Reporting Act (FRCA). CHEX Systems Collection Agency is a “debt collector” subject to the Fair Debt Collection Practices Act (FDCPA) and state collection law. So, if CHEX Systems seeks to collect on a debt after your bankruptcy they are required by law to remove the debt, but not required to remove the “for cause” entry, and unless you can get that removed by the member bank it will remain on the report for 5 years.
If your previous negative banking activity/history was simply a matter of bounced checks, you can sometimes get a reprieve from the local bank manager if you can show that the bounced checks have been paid in full and any penalties were paid in full.
However, if you banking activity involved extensive overdrafts or fraud, you can’t talk you way out of this.
Disclaimer
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 offices at: (559) 228-1500 to schedule a consultation.
