Tips When Switching Banks

Tips When Switching Banks

At Welker and Company, we always recommend that individuals making an assignment in bankruptcy or consumer proposal switch banks and attempt to close their current account.
We know it’s a pain, but here’s why we think that switching banks is a good idea.

  1. If you owe your bank money, they may offset your bank balance against your debt.  This can present a big problem if your rent or mortgage money is sitting in your account and disappears a few days before it is due.
  2. Pre-authorized debt payments may be withdrawn even after you file with Welker and Company.  If you file today, your creditors may not become aware of your bankruptcy or consumer proposal for a few days.  This could result in them withdrawing a pre-authorized debit even after you file.  If this occurs, it is very difficult and often impossible for Welker and Company to have the creditor return the unlawful payment to you.
When Switching Banks
  • Open a new chequing account at a bank that you don’t owe any money to
    • Consider a no-fee bank such as Tangerine (Formerly ING Direct).
  • Direct your employer and the government to deposit funds into your new account
  • Transfer payments that you wish to continue.  For example:
    • Telecommunications (Cell Phone, Internet, Home Phone)
    • Utilities (Hydro, Water, Gas)
    • Car Payments & Insurance (If you’re keeping your car)
    • Mortgage, Property Tax, and Insurance Payments (If you’re keeping your house)
    • Life Insurance Payments (If you’re keeping your policy)
  • Do not transfer payments related to your credit cards, or other debt to your new account
  • Attempt to close your overdraft if present

An ounce of prevention is better than a pound of cure.  Our aim is to provide you with a fresh start, and the best way of ensuring that you get one is to cut your banking ties and start fresh.

Get in touch

If you’re struggling with debt then give us a call.  We’ll take the time to understand your unique personal situation for free, and explain your options to you so that you can make the best possible decision and sleep better at night.  Get in touch with us today!