How do Creditors Find Out if you have opened a New Bank Account?
When you are in debt, it can be very easy to make mistakes and one of the biggest mistakes that a lot of people do when they are in trouble is to keep quiet and ignore their creditors. If you stick your head in the sand, your creditors may be able to find and access your bank account and take your money without your knowledge or permission. Imaging waking up one morning and finding your bank account emptied!
So just exactly how do creditors find out if you have opened a new bank account?
- ChexSystems or Telecheck. If you’ve ever written a check in a store, or opened a bank account, the odds are about 99% that your application (or electronic check) went through ChexSystems or Telecheck. You’re in their database, and that means your creditors can just send a copy of the judgment and Chexsystems/Telecheck will fork over your bank account details.
- Creditors can go straight to the courts. A judge can order a “discovery” for you to hand over your bank account information (and he’ll stick you in jail if you don’t comply).
- They call your old landlord, your car repair shop, your kids’ school, your employer (or past employer) your credit card company, anywhere that you might have written a check or provided a bank account number. With a judgment put in front of them, just about anyone will turn over that information.
If (and when) your creditors do find out who you bank with, there is nothing to stop them from recovering any monies owed to them by filing for a garnishment through the courts.
What a lot of people do if they are in financial trouble is open up a new account with a different bank and shift their money around. While this is a good temporary way of protecting your money, it will catch up to you in the end.
If you are faced with garnishment, you may have no option but to arrange a payment plan. Most companies will allow you to pay off your debt over time with a minimum payment. Your other option is bankruptcy which will erase all of your debts. Neither of those a good option for you? Check out How to Stop Wage Garnishments Without filing for Bankruptcy. The same tricks that apply to stopping wage garnishments may also apply to stopping bank account garnishments.
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