Can I Open A New Bank Account While Bankrupt in Ontario?

| Category: Bankruptcy in Ontario | Bankruptcy FAQ
Category: Bankruptcy in Ontario | Bankruptcy FAQ | (2) comments

Yes. In fact, we strongly recommended that you open a new bank account with a new bank before going bankrupt in Ontario.

bank account in bankruptcyWhy? Because you want all payments to your unsecured creditors to stop. You do not want to risk having one of your creditors attempt to take an unauthorized payment out of your account, and the best way to do that is to open a new bank account at a new bank (where you don’t owe any money).

A bank is not allowed to refuse to open a bank account for you (unless they believe the account will be used for illegal purposes).

More information can be found on the Department of Justice Canada’s web site.

Even with these rules, some banks may be reluctant to permit you to open a new bank account once you are bankrupt. Therefore, it is a good idea to open a new bank account before you file for bankruptcy in Ontario. This will also give you lots of time to have your payroll deposit and other items transferred to your new account before your bankruptcy starts.

Your trustee will be able to answer any further questions you may have about opening a new bank account and what you can and should transfer.

Contact an Ontario bankruptcy trustee today if you are thinking of filing bankruptcy and have more questions.

Leave A Comment

  1. Ray

    To Whom It May Concern:

    Can I continue to use my existing bank account without having to open a new one at a new bank?

    Reply
  2. J. Douglas Hoyes

    Yes, you can continue to use your existing bank account. However, if you owe money to that bank, or if any of your other creditors have access to that bank account (because you made payments from that account, or had pre-authorized payments set up from that account) you run the risk that payments will be taken from your account post-filing. The only strategy that guarantees there will be no payments taken from your old account is to open a new account at a new bank, and stop using the old account.

    Reply

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