Opening a Checking Account after Bankruptcy

Bankruptcy presents many unique obstacles to those looking to establish any sort of financial independence afterwards. Getting a checking account after bankruptcy may be a bit difficult, but it is by no means impossible.

Checking Account Types

Opening a checking account with bankruptcy can present an entire litany of roadblocks. Many banks offer an entire range of checking account types offered to potential customers based upon their income, assets and account balances. For instance, someone making six figures a year will qualify for an interest-bearing account that generates much more money than someone making five figures annually. People with excellent credit often qualify for accounts that offer physical and monetary rewards on a semi-annual basis, while those with credit problems will not. Bankruptcy is often considered the ultimate blow to a consumer’s credit record, but there are ways to obtain a checking account after bankruptcy.

Bankruptcy Qualifications

People who have filed bankruptcy will often not be qualified for the high-interest bearing accounts that those with perfect credit have access to.

Although this may be a difficult thing to deal with, it is important for people opening checking accounts with bankruptcy to remember that each financial move they make is being tracked and recorded for their future financial gain. Therefore, people can continue to strengthen their credit right after a bankruptcy. Even banks that offer low-interest or no-interest checking accounts can report financial information to credit companies, meaning that a good banking relationship—regardless of account type—always benefits the consumer.

How Bankruptcy affects Bank Debts

Although bankruptcy has no effect on secured debts issued by banks for things such as homes and vehicles, any unsecured bank debt can be wiped clean for a fresh financial start. Often, people open checking accounts at the same banks that have offered them secured or unsecured loans for convenience. When these loans go unpaid due to bankruptcy, most people in this situation are required to also close any checking and savings accounts they have with that particular bank and start anew somewhere else. Opening a checking account after bankruptcy often requires finding a new bank that offers checking accounts that accommodate the person’s means and credit circumstances.

Finding the Right Bank

Credit unions are often great options for someone opening a checking account after bankruptcy since they are member-owned and often not as stringent as other bigger banks. Many credit unions do not check a potential customer’s past banking record before offering a checking account, but these account types come with several fees and stipulations not present in traditional accounts. National banks will sometimes offer checking accounts with bankruptcy history, but they will only issue debit cards in lieu of standard paper checks. This allows consumers to have the necessity of a checking account while giving the bank a sense of security from the possibility of unpaid overdraft fees and check fraud.

Second Chance Checking Accounts

Second chance checking accounts are becoming more and more popular all over the country and can be opened in large national banks and credit unions alike. These are great options for anyone seeking to open a checking account after bankruptcy and open up an entire world of possibilities. People with multiple check fraud issues or a huge amount of unpaid bank fees may not qualify, but a single bankruptcy is often not enough to prevent access to second chance checking accounts. These accounts often have monthly fees that are the customer’s responsibility, and the accounts are non-interest bearing. They still provide all of the perks of a standard checking account and are a great way to rebuild credit.

Checking Account Alternatives

For people who find themselves unable to open a checking account due to excessive fraud or a very large amount of unpaid bank fees, there are other options available. The most popular option is the prepaid debit card that can be purchased at thousands of locations all over the country. These cards often require that the user pay certain fees to load the cards, but direct deposit from the customer’s employer is free in most cases. These cards work just like a debit card associated with a checking account and give consumers a way to utilize online bill payment and shopping. They are a great way to reduce the need for carrying large amounts of cash, and they come with very stringent theft protection.

There are several issues that people may face when opening a checking account after bankruptcy, but this does not mean it is an impossible feat. Many banks and credit unions offer checking accounts to those with significant credit issues, and there are other options available that often serve the same purpose.

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