Will I Have Trouble Opening Bank Accounts due to Bankruptcy?

Posted by: Sandy Lyons on 02/17/2012

Do you think that you will have trouble opening bank accounts in the future if you file for bankruptcy? Should it affect your decision to file? Bankruptcy can be an effective method for managing overwhelming debt, especially if prior preparations are made that can ease the filer through bankruptcy proceedings and allow him or her to reduce the negative impact of this legal action on overall finances. However, many people are misinformed about the ramifications of filing for bankruptcy and these misconceptions may push the debtor into pursuing other less effective means of debt relief. To find out the real facts about bankruptcy, the filer should identify reliable sources of information that can help dispel myths such as bankruptcy causing a filer to have trouble opening bank accounts.

In 2003, the government started implementing the Access to Basic Banking Services Regulations, which leverage the bankruptcy filer’s chances to restore financial stability via the use of bank services. These regulations stop banks regulated by the federal government from denying basic banking services to any applicant regardless of financial history, provided that the individual has not committed crimes such as fraud, bank personnel harassment, or the use of false IDs. However, the applicant has to realize that these regulations do not cover applications done over the Internet or the phone – he or she has to make a personal appearance at the bank itself and provide some of the following pieces of identification: a passport, driver’s license, health card, SIN card, naturalization certificate, or Canadian birth certificate.

You may have declared bankruptcy or are currently in the process of filing. You may have reduced your income due to investment losses or job loss. None of these situations merit the denial of basic banking services. If you do encounter any difficulty in applying for and obtaining these services due to your financial history, you may go to the website of the Financial Consumer Agency of Canada, find the complaint form, and file a complaint against your bank. In general, you may not have to go that far as the bank itself will likely rectify the situation once you make a complaint.

Filing for bankruptcy or declaring bankruptcy will not and should not be an obstacle to applying for a bank account or any other basic bank services – federal regulations make this much certain. For any questions you may have, go straight to a licensed bankruptcy trustee whose training and certification under the Office of the Superintendent of Bankruptcy ensures that you will receive practical, updated, and correct information about bankruptcy and other topics related to it.

The outcome of your bankruptcy filing or any other legal alternative that affords you debt relief depends mainly on the quality of assistance you receive before, during, and after your debt management efforts. Unfortunately, not all debt consultants are created equal and some of these providers may even feed you myths (such as bankruptcy causing trouble opening bank accounts) so you will enlist their dubious aid for the resolution of your debt problems.  Speak to a licensed bankruptcy trustee to get the facts about bankruptcy and other debt management solutions.