Will I lose the money in my checking and savings if I file for bankruptcy?

When you file for bankruptcy, the bankruptcy trustee will take over all your non-exempt assets and liquidate them to repay your creditors. Your bank accounts will fall under the wildcard exemptions. If you plan properly you can have the entire amount in your bank accounts as exempt assets.

With proper planning you may claim personal property exemption for your bank accounts. The amount up to which you can claim exemption depends on your state laws. Some states allow you to use federal exemptions. The exemptions may be doubled if you file with jointly with your spouse.

You will not loose the money in your bank accounts to your creditors once you file for bankruptcy and if the amount in the account is within the permitted exemption. Due to the automatic stay, creditors cannot proceed to attach your bank accounts.

However if your account is with a bank from whom you have availed credit which is outstanding, the bank may have a right of set off on your account and use the money to pay off or adjust towards the outstanding. This means the bank will take any money out of the account on the day the bankruptcy is filed.

Talk to a Bankruptcy Lawyer before you do anything to find out how to plan your bankruptcy case, what bills you can avoid paying and how you can save as much money as possible in your bankruptcy case.