A forgotten account can go negative, and the bank will charge you overdraft fees until you close it or bring it current
If you stop using a checking account and forget about it, the account does not simply disappear. Banks keep the account open as long as there is no instruction to close it. If a recurring charge posts to that account—a subscription you forgot to cancel, an automatic bill payment, a monthly maintenance fee—the balance can drop below zero. Once it does, the bank charges an overdraft fee, usually $25 to $35 per transaction that pushes the account negative. Those fees stack up fast, especially if multiple charges hit in the same month.
The bank will not close the account on its own just because it is negative. They will keep charging fees and may eventually send the account to a collection agency if the negative balance sits unpaid for long enough—typically six months to a year, depending on the bank's policy. At that point, the debt appears on your credit report and a debt collector may contact you.
Key Takeaways
- A forgotten account can accumulate overdraft fees every time a charge posts and the balance goes negative, with each fee typically ranging from $25 to $35.
- Banks do not automatically close accounts with negative balances; the account remains open and continues to accrue fees until you close it or pay the balance.
- If a negative balance sits unpaid for six months to a year, the bank may send the account to a collection agency, which will report the debt to credit bureaus.
- Stopping the bleeding means finding the account, identifying what charges are still posting, and either closing it or bringing the balance positive.
- Some banks offer overdraft protection or will waive one or two fees if you contact them and explain the situation, though this is not may provide.
How overdraft fees pile up on a dormant account
The most common reason a forgotten account goes negative is a recurring charge that keeps posting even though you are not using the account. A streaming service subscription, a gym membership, an insurance premium, or an automatic utility payment can all hit a zero or near-zero balance and trigger an overdraft. Once the balance is negative, the bank charges an overdraft fee. If another charge posts the next day, you get another fee. If you have set up automatic bill payments that still run, you can rack up $100 to $200 in fees in a single month without touching the account.
Some banks charge a fee just for maintaining a negative balance—a daily or monthly "negative balance fee" on top of the per-transaction overdraft charge. Others charge a fee when they attempt to collect on the negative balance. The exact fees and policies vary by bank, but the result is the same: the longer the account sits negative and forgotten, the larger the hole becomes.
When the bank sends your account to collections
Banks have different thresholds for when they stop trying to collect and hand the account off to a third-party debt collector. Most banks will wait six months to a year before doing this, but some move faster. Once the account is sent to collections, two things happen: the debt collector begins trying to contact you, and the debt appears on your credit report as a collection account.
A collection account on your credit report damages your credit score and stays there for seven years from the date the account first went delinquent—not from the date it was sent to collections. This affects your ability to get a loan, a credit card, or sometimes even a job or apartment. The debt collector can also sue you to recover the money, though they must follow your state's laws on debt collection and statute of limitations for lawsuits.
How to find and fix a forgotten account
Start by searching your email for statements, receipts, or login confirmations from the bank. Look for old bank statements in your files or ask the bank directly. If you remember which bank it was, call their customer service line and give them your name and Social Security number; they can search their records and tell you if you have an account with them and what the balance is.
Once you find the account, log in or call the bank and identify what charges are still posting. Cancel any subscriptions or automatic payments you no longer want. Then decide whether to close the account or bring it current. If the negative balance is small—under $50—you can often pay it off with a debit card or bank transfer and close the account the same day. If the balance is larger or you cannot pay it immediately, contact the bank and ask if they will waive one or two overdraft fees as a courtesy. Some banks will, especially if you have been a customer for years and this is your first problem.
If the account has already been sent to collections, you will need to contact the debt collector, not the bank. Ask for a written verification of the debt and negotiate a settlement or payment plan. Do not ignore collection calls or letters; responding and working toward a resolution is better for your credit than letting it sit.
Overdraft protection and other ways to stop the fees
If you still use the bank and want to keep the account open, ask about overdraft protection. This is a service that links your checking account to a savings account, credit card, or line of credit. If a charge would overdraft your checking account, the bank transfers money from the linked account instead, usually charging a small transfer fee ($1 to $5) rather than a large overdraft fee ($25 to $35). This does not help a forgotten account, but it can prevent the problem from happening again.
Some banks also offer overdraft opt-out, which means the bank will decline transactions that would overdraft your account rather than charging a fee. This stops the fees but means your card or check will be declined at the point of sale. Ask your bank what options they offer.
The difference between a negative balance and a closed account
A closed account is not the same as a negative account. If you close an account while it has a positive balance, the bank closes it immediately and you can withdraw the money or have it transferred. If you close an account with a negative balance, you still owe the bank the money—closing the account does not erase the debt. The bank will still try to collect, and if you do not pay, it will still go to collections.
Some banks will not let you close an account online if it is negative; you have to call or visit a branch. Others will close it but will keep trying to collect the negative balance. Either way, owing money to a bank is a debt, and the bank has the right to pursue it.
What to do if you cannot pay the balance right now
If the negative balance is large and you cannot pay it immediately, contact the bank and explain the situation. Ask if they offer a payment plan or if they will accept a settlement for less than the full amount. Some banks will negotiate, especially if the account has been dormant and the negative balance is mostly fees rather than actual money you spent.
If the bank refuses to negotiate and the account goes to collections, you can still contact the debt collector and try to work out a deal. Debt collectors often accept settlements for 40 to 60 percent of the debt if you can pay in a lump sum. Get any agreement in writing before you pay.
Do not ignore the problem. The longer you wait, the more fees accrue, the more likely the account goes to collections, and the worse the damage to your credit. Even if you cannot pay the full amount right now, contacting the bank or collector and showing that you are trying to resolve it is better than silence.
Frequently Asked Questions
Can a bank close my account if it is negative?
Banks can close accounts with negative balances, but they do not have to do it automatically. Most will keep the account open and keep charging fees until you close it or pay the balance. If you ask the bank to close it, they will, but you still owe the negative balance.
Will a negative checking account show up on my credit report?
A negative checking account does not appear on your credit report unless it is sent to collections. Once a debt collector takes over, it shows up as a collection account and damages your credit score for seven years.
How long can a bank chase me for a negative balance?
Banks can pursue a negative balance indefinitely, but most stop actively trying to collect after six months to a year and send it to a debt collector instead. Your state's statute of limitations on debt—usually three to six years—limits how long a debt collector can sue you, but it does not erase the debt itself.
If I pay the negative balance, will the overdraft fees come off my credit report?
If you pay before the account goes to collections, it will not appear on your credit report at all. If it has already been reported as a collection account, paying it will not remove it from your report, but it will show as "paid" or "settled," which is better than an unpaid collection.
What if the bank made a mistake and charged me overdraft fees I did not deserve?
Contact the bank and explain what happened. If the fees were charged in error—for example, if a charge posted twice or if the bank miscalculated the balance—they may reverse some or all of the fees. This is not may provide, but it is worth asking, especially if you have been a customer for a long time.