Are Bank Overdraft Fees Dischargeable in Bankruptcy in New York City?

Filing for Chapter 7 or Chapter 13 bankruptcy relief in New York City will allow you to wipe out most of your debts, including bank fees like overdraft charges or bounced check fees. These fees add up quick and can mean financial ruin for people already struggling to make ends meet. At upwards of $35 per occurrence plus $9 per day the fees can eat up entire paychecks still leaving our clients overdrawn on payday. The good news is these fees can be included with your other debts on your bankruptcy petition and then discharged in the bankruptcy process so you will never be responsible for them again. There may be some negative consequences to this, the bank isn’t going to like it, but it is usually still the best solution for people being eaten alive by bank fees and unable to pay their bills already.

If you are regularly receiving overdraft charges on your bank account it is likely you are already in the system with negative marks against your account history. Banks share information, so depending on the severity and duration of the overdraft charges most traditional banks will deny you another account if you simply try to change to another bank. If you can it might make sense to open another bank account before filing your bankruptcy petition, but the situation for many of our clients is already too far gone to usually qualify for an account at another bank.

Filing bankruptcy on the other hand will actually improve many people’s chances of opening another account at a different bank. Under the Fair Debt Reporting Act any record in the banking system about your past fees must be updated to show a $0 balance with a special note about the debt being discharged in bankruptcy. Understanding the fresh start bankruptcy provides many banks are more inclined to open an account for someone who has recently filed bankruptcy than for someone refusing to do anything about their bad financial situation.

If you are facing constant overdraft fees from your bank and underwater on your finances speak to a qualified bankruptcy attorney about your options. You can break the cycle and will feel the immediate relief from your debts on day one. If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today. We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients