I just found out that when you file bankruptcy, Wachovia will freeze your accounts. That’s even if you don’t owe them any money.
So if you are thinking of filing bankruptcy, get your money out of Wachovia.
This has been the policy of Wells Fargo for several years, but there weren’t any Wells Fargo Banks in Northern Virginia. Wells Fargo took over Wachovia in the mortgage crisis and now they are freezing people’s accounts when they file bankruptcy in Virginia, too.
I see a lot of people in this part of Virginia who bank with them. They base this policy on this court decision from Texas. It doesn’t persuade me, but it persuades them.
So, if you are filing for bankruptcy, get your money out of that account. (And turn off the direct deposit if that’s where it’s going.)
PS Roderick Martin, a bankruptcy lawyer in Georgia, just had one of his clients hit by Wachovia freezing his bank accounts. He sent copies of the Wachovia letter to other lawyers around the country, as a warning, and looking for ideas on what to do. Here’s Wachovia’s letter, dated May 2010.
PS On June 30, 2010 an important court decision–from the 9th circuit bankruptcy appellate panel–told Wells Fargo they have to stop this. I understand though that they have appealed.
PS Bruce White, a bankruptcy lawyer in Richmond, shared this August 2011 letter from Wachovia, explaining that they still freeze people’s accounts. Get your money out of Wachovia. You can see the letter here.