(NewInsights.org) – Opening a checking account is an essential first step in building a healthy financial life. It allows you to pay for items without cash, get paid via direct deposit, and even pay monthly bills safely and securely. You may also need a checking account before financing a vehicle, applying for credit, or renting an apartment. But what happens if you’re currently in Chapter 13 bankruptcy; can you expect the bank to approve you for an account?
Am I Allowed to Open a Checking Account?
Yes, you can! Nothing in the court rules or bankruptcy code prohibits you from opening a new bank account. However, you should advise your bankruptcy lawyer or trustee of your intention to open the account in advance. They may need to review your statements regularly or factor them into your overall Chapter 13 repayment plan.
Before opening your account, research which bank is right for you. Banks may charge monthly maintenance fees, as well as out-of-network ATM fees.
Will They Run My Credit?
Typically banks do not run credit inquiries for new account applications. However, they will often run a ChexSystems report. A ChexSystems report summarizes your financial history with bank accounts in the past. The report shows if you have had account freezes, overdrafts, and bad checks. In addition, it will let the bank know if you have ever closed an account with a negative balance.
What If the Bank Declines My Application?
If the bank declines your application to open a checking account, don’t worry! You have several options. First, you can try to fix the issues triggering the rejection. Second, you can ask the bank to reconsider your request. In addition, there is a relatively new offering you should consider: second-chance banking.
What Is Second Chance Banking?
Second chance checking accounts are just like regular bank accounts with fewer services and some limitations. These accounts will often skip the history checks but include fees you should research before accepting the offer. If you are looking for a second chance banking option, traditional banks such as Wells Fargo and non-bank finch companies like Chime offer these options.
Keep Your Progress Moving
Once you have your new checking account, you can and should explore other products your bank offers. Savings and money market accounts or certificates of deposit (CDs) offer higher interest rates than checking accounts. They may help you build your long-term savings.
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