General bank policies

  • If you have overdraft protection, the bank may put a freeze on your bank account once they are notified of the bankruptcy, and request that you make arrangements to open a new bank account.  Some individuals have then encountered problems opening a new bank account with the existing bank because of the bankruptcy.
  • Once the bank is notified of the bankruptcy, they may put certain restrictions on your bank account, such as freezing your access to ATM machines.
  • If you have a vehicle loan with certain financial institutions, it is their policy to enforce their motor vehicle security agreement and proceed with repossession, regardless of whether payments are up to date or not.
  • If you have a vehicle loan with certain financial institutions, they may proceed with the repossession of the property as your assignment in bankruptcy renders you in default under the contract.  They will also repossess if the customer has transferred the vehicle to a third party, has not maintained the vehicle in a good state of repair, is unable to provide adequate proof of insurance or is in default in payments at the date of the bankruptcy or proposal.
  • Your bank has the right of set-off to any funds in your account at any time up to the date of your bankruptcy.  For example, if you owe a Visa, which is a division of your bank, and you have funds in a bank account there, the bank can take the money in your bank account at the date of bankruptcy, and apply it, by way of set-off, against your Visa account, or any other debt you may owe to them.