What Happens With Bank and Investment Accounts?
Generally, in your Bankruptcy Petition you must list every bank account and investment account you have in your name which includes, but is not limited to: checking accounts, savings accounts, CD’s, stock accounts, money market accounts, retirement accounts, 401k accounts, IRA, and SEP accounts.
There is no particular exemption (or means to preserve in bankruptcy) for most types of bank and investment accounts, unless it is a “qualified” retirement account such as 401k’s, IRA’s, SEP’s and pension accounts.
As such, we generally recommend that clients keep a minimum amount deposited in these accounts, particularly on the day of filing for a Chapter 7 or 13 Bankruptcy. Since there is not a particular exemption to protect these assets, you may be only be able to rely on a “wild card” exemption. This exemption allows each debtor to protect up to $1,000 of assets ($2,000 for a couple) that are not otherwise exempted and we often use this “wildcard” for bank accounts or tax refunds.