If I file the petition for an emergency bankruptcy, will my bank account automatically be unfrozen? As of right now my bank account is not yet frozen, but since I have judgments against me, it could happen at any time. I don't have a bank account per say, but I have a payroll card with my employer through a federal union bank. And my concern is that I'm anticipating an income tax refund direct deposited onto my payroll card. I should receive it in about 12 days. But I'm concerned within the 12 days the creditors will find my payroll account and freeze it. If that was to happen, what would be the remedies available to me to prevent them from taking the money? If I file the petition will unfreeze it immediately? But can I cancel my bankruptcy petition after the account is unfrozen?
If you file a chapter 7 or chapter 13 in particular the day it is filed all of your bank accounts and any collections efforts will have to stop on that day.
The automatic stay will be in effect until the bankruptcy case is dismissed.
If you file a chapter 7 bankruptcy and want it to be dismissed it will take several months, so during this time collection agencies cannot garnish or try to collect on you.
I honestly do not plan to file bankruptcy right now; however, I just want to use the threat of bankruptcy. So if the creditor freezes my account before my income tax is direct deposited to my account, I can file for an emergency bankruptcy and that will prevent creditors from taking my anticipated refund? And if I only plan to use the bankruptcy threat as a strategy to unfreeze my account, don’t I still have to obtain an attorney or do I just pay court costs? And are there any consequences if I personally dismiss the bankruptcy petition and postpone the bankruptcy for another year or so?
If your bank account is frozen your refund will be taken, so then you will have to be careful when you file. I would file a chapter 13 not a chapter 7, as a chapter 13 can be easily dismissed.
You do not need an attorney to file an emergency petition; you would just have to pay the Court fees.
Well the thing is my refund will be in my account February 11, let's say they freeze my account on February 9, and I file for an emergency bankruptcy Feb. 9, could I prevent them from taking the future direct deposit which is tax refund?
Yes, that would stop the garnishment.
So the bankruptcy automatic stay takes effect the same day? So let's say the freeze my account but I file for automatic stay on February 9 or 10 but they still take my refund on the 11th. Will they reimburse me? And will the court allow me to dismiss my bankruptcy and postpone it to a later date, or will that create a problem if I sexes to file bankrupt g again the next year?
They can reimburse you but you will need the Trustee to order it, and it will take time. I would file prior to the 2/11.
The Court will allow you to withdraw or dismiss your case, but in a chapter 13 filing its easier.
If I don’t qualify for 13, so what r the compilations with withdrawing chapter 7?
A chapter 7, once filed the trustee is involved directly, and in most cases will allow you to withdraw your case, but could make it difficult for you to get your refund back, as your refund would go to your estate, or to him not you.
That is why you should file first, and make sure your account is open.
In a chapter 7, tax refunds usually are taken by the trustee.
Even if you do not qualify for a chapter 13, you should file that anyway as you will be withdrawing it, and not following through.
And there is no way to close an account after it's been frozen, to prevent future anticipated deposits that haven't taken place yet?
No, you would have to contact the companies who are depositing checks to stop.
You may have to try to contact the IRS if possible to have them send you a check instead.
I already called the IRS but they told me once it's filed they cannot convert it to paper check, they told me I would have to wait until the bank rejects it. If the account is frozen, will the bank reject the deposit?
No, the bank would take the deposit and the creditor would usually be able to take any deposit.
You could close your bank account now, and then when the check is rejected have them send it to you.
I would still suggest a chapter 13,
So I can file for an emergency chapter 13 as a strategy for automatic stay, even if I don't qualify for it?
Yes, you just need to have the pre filing certificate, and just file the basic schedules required.
So let's say they freeze my account sometime between now and when I receive my tax refund, as long as I have the pre filing certificate they will have to reimburse me, even if I file after they freeze it?
Or once they take the money I can't be reimbursed?
The pre filing certificate is needed to file a bankruptcy, so if they freeze your account now, you file the bankruptcy and your account would be unfrozen.
If they somehow take your refund, filing a bankruptcy to get your money back is allowed, however the trustee in a chapter 7 may take it.
You need to obtain a pre filing certificate and file an emergency chapter 13 soon.
Then once you get your refund close your account, and do not appear at your 341 hearing and your chapter 13 will be dismissed.
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