NEW YORK – Filing for bankruptcy is one of the most devastating moments in life. Your finances are messed up, you’re sunk in debt, you are uncertain of your future and that of your family, everything seems to be going downhill. What do you do now?
But that’s not the end of life. You can still pick yourself up and get back to financial freedom and a good starting point to do this is to open a new bank account.
To guide you on this, here are 5 tips to opening up a bank account after bankruptcy:
- Set Up A Secure Bank Account
If bankruptcy is the only negative file on your record, there is a provision for you to open up a new bank account. If, however, you have a bad record with other banks that you banked with previously, it may be harder to set up a new account.
You can set up a secured bank account, which is also known as a second-chance account and use it as a means to rebuild your credit.
- Set Up A Basic Bank Account
It is highly advisable that you go to another bank that you don’t have a debt with and request that they set up a basic bank account for you. A basic bank account is a type of current account without essential features. The services you get from it are a debit card, standing orders, and direct debits.
You’ll be able to receive payments such as salary from your employer and you’ll also be able to make payments via the debit card issued to you. Don’t apply for a basic bank account with a bank which you have debts with.
- Consult A Smaller Bank Or Local Credit Union
If you’ve been banking with a large bank and have filed bankruptcy with them, you can approach a smaller bank or a local credit union. They are open to people who have just filed bankruptcy and may offer some favorable terms to set up a new bank account for you. Do a thorough research on the small banks and credit unions before you approach them.
- Put Up Collateral
Since no bank is willing to set up an account for you that easily after bankruptcy, you can opt to offer some protection to the bank you approach as a means to get them to open it up for you. A proper way to do this would be to deposit money via a certificate of deposit and this will act as collateral. Once this is done, the bank could reconsider setting up a checking account for you.
- Go For A Bank That Is FDIC Insured
Even as you seek to open a savings and checking bank account after bankruptcy, ensure that the bank you approach is FDIC (Federal Deposit Insurance Corporation) insured. Banks go through major financial issues and they do collapse at times and if this happens to your bank, the FDIC insurance will have your money protected.
Opening up a bank account after bankruptcy isn’t an easy endeavor. Don’t be surprised when you get turned down by banks for your application to set up a new account. But it’s not all banks and credit unions that will turn you down.
There are those that don’t make use of ChexSystems to analyze your credit information and they are more likely to set up a bank account for you. Let Me Bank links you to these banks.