Yes, you can open a checking account during Chapter 13

A Chapter 13 bankruptcy does not prevent you from opening a checking account. Banks are not required to deny you an account based on your bankruptcy status alone. What matters to most banks is your banking history with them — specifically, whether you have unpaid overdrafts, fraud, or other account problems recorded in ChexSystems, a banking history database that tracks account closures and disputes.

The real obstacle is not the bankruptcy itself but finding a bank willing to work with you. Some banks will open accounts for people in active Chapter 13 cases; others will not. Your best options are smaller banks, credit unions, and online banks, which tend to have more flexible policies than large national chains.

Your Chapter 13 trustee does not need to approve the account, and opening one does not affect your repayment plan. However, the trustee can see your bank accounts during the case, and any money you deposit may be subject to the plan if you have disposable income that should go toward creditors.

Key Takeaways

  • Chapter 13 bankruptcy does not legally bar you from opening a checking account, but individual banks set their own policies.
  • Credit unions and smaller regional banks are more likely to open accounts for people in bankruptcy than large national banks.
  • Your banking history in ChexSystems matters more than your bankruptcy status — unpaid overdrafts or fraud will block you more reliably than a Chapter 13 filing.
  • Money you deposit into a new account may be counted as income in your repayment plan if you have disposable income obligations.
  • You do not need trustee permission to open an account, but the trustee can monitor your accounts throughout the case.

Why banks check ChexSystems instead of just looking at bankruptcy

Banks use ChexSystems to screen applicants because it shows whether you have mismanaged accounts in the past — overdrafts you did not pay back, accounts closed due to fraud, or repeated NSF (non-sufficient funds) fees. A Chapter 13 filing does not appear on ChexSystems. Your bankruptcy shows up on your credit report, but most banks opening new accounts do not pull your credit report for this decision.

This means a person in Chapter 13 with a clean banking history may open an account more easily than someone who has never filed for bankruptcy but has multiple unpaid overdrafts. Banks care about whether you will manage the account responsibly going forward, not about your past debt.

If you closed accounts badly in the past — leaving them overdrawn or letting them go to collections — those marks stay on ChexSystems for five to seven years. You can request your own ChexSystems report for free at www.chexsystems.com to see what is listed under your name before you apply anywhere.

Which banks and credit unions are most likely to say yes

Large national banks like Chase, Bank of America, and Wells Fargo typically have stricter ChexSystems policies and may deny you if you have any negative history, regardless of bankruptcy status. They also often require a minimum opening deposit and maintain higher monthly fees.

Credit unions are usually more flexible. If you have any connection to a credit union — through your employer, a family member, a union, or even your neighborhood — ask whether they will open an account for someone in Chapter 13. Many credit unions review applications individually rather than using automated ChexSystems screening alone.

Smaller regional banks and online banks (like Chime, LendingClub, or Varo) often have looser policies and may open accounts for people with bankruptcy or negative banking history. Online banks especially tend to focus on current behavior rather than past problems. Call ahead or check their website for their specific policy on Chapter 13 cases before you apply.

What to expect when you apply

When you apply for a checking account, the bank will ask for your Social Security number, a government ID, and proof of address. They will run a ChexSystems check and may also run a soft credit pull (which does not affect your credit score). Some banks will ask directly whether you are in bankruptcy; others will not.

If you are asked, answer honestly. Lying about your bankruptcy status is fraud and can result in account closure and legal consequences. If the bank denies you, ask why. If it is because of ChexSystems, ask for a copy of the report so you can dispute any errors. If it is because of your bankruptcy status specifically, try a different bank — that bank's policy is not universal.

Approval usually happens the same day or within one business day. You will receive a debit card by mail within 7 to 10 business days, though some online banks issue a temporary card number immediately so you can use the account right away.

How your Chapter 13 trustee views your bank account

Your Chapter 13 trustee has the legal right to monitor your bank accounts throughout your case. When you file, you disclose all accounts you own. The trustee can request bank statements to verify that you are making your plan payments and that your income and expenses match what you reported.

Money you deposit into a new account is treated as income. If your Chapter 13 plan requires you to pay all disposable income to creditors, the trustee may argue that money in your account should go toward the plan instead of staying in your account. This is especially true if you receive a bonus, tax refund, or other lump sum while in the case.

This does not mean you cannot have a checking account or save money. It means the trustee can see what you have and may question large deposits or balances that seem inconsistent with your reported budget. Keep records of where money comes from — paychecks, reimbursements, gifts — so you can explain it if asked.

Fees and account features to watch for

Banks that accept people in bankruptcy sometimes charge higher fees than mainstream banks. Look for accounts with no monthly maintenance fee or a fee that is waived if you maintain a minimum balance or set up direct deposit. Overdraft fees can add up quickly, so prioritize banks that offer overdraft protection or simply decline transactions when you do not have funds rather than charging a fee.

Some banks offer "second chance" checking accounts specifically for people with banking problems. These accounts may have lower fees than regular accounts but often come with restrictions — a lower daily withdrawal limit, no debit card, or a required savings component. Compare the terms before you open one.

Online banks tend to have lower fees overall because they have no physical branches. If you are comfortable banking entirely through an app and do not need in-person service, an online bank may save you money.

What to do if you are denied

If a bank denies you, ask for the specific reason in writing. If it is a ChexSystems issue, request a copy of your report and look for errors — banks sometimes report accounts incorrectly, and you can dispute inaccurate information directly with ChexSystems.

If the denial is because of your Chapter 13 status, that bank will not work for you, but others will. Do not apply to multiple banks in a short time — each application triggers a ChexSystems inquiry, and multiple inquiries in a short window can make you look riskier to other banks.

If you cannot open a traditional checking account, consider a prepaid debit card as a temporary solution. Prepaid cards do not require a credit check or ChexSystems screening, though they charge fees for each transaction. They are not ideal long-term, but they let you receive direct deposit and pay bills while you work on opening a real account.

Frequently Asked Questions

Will opening a checking account hurt my Chapter 13 case?

No. Opening an account does not affect your bankruptcy status or your repayment plan. The trustee does not need to approve it. However, money you deposit may be counted as income if your plan requires you to pay all disposable income to creditors, so keep records of where deposits come from.

Can my bank close my account because I am in Chapter 13?

A bank cannot close your account solely because you filed for bankruptcy. However, if you overdraft the account, bounce checks, or engage in fraud, the bank can close it. Banks also sometimes close accounts if they see activity they consider suspicious, so keep your account in good standing.

Do I have to tell the bank I am in Chapter 13?

Only if they ask. If a bank asks directly whether you are in bankruptcy, you must answer truthfully. Lying is fraud. If they do not ask, you are not required to volunteer the information, though the bank may discover it if they pull your credit report.

What if I receive a tax refund or bonus while in Chapter 13 — does it go to my trustee?

It depends on your plan. Some Chapter 13 plans require you to report and turn over lump-sum income like tax refunds or bonuses. Others do not. Check your plan documents or ask your bankruptcy attorney. If you are unsure, deposit the money into your account and contact your trustee before spending it.

Can I use a joint account with someone else while in Chapter 13?

Yes, but the trustee can see the account and may question large deposits or balances. If the account is truly joint and the other person contributes money, keep clear records showing which deposits are theirs. Mixing your money with someone else's in a joint account can complicate things, so consider a separate account in your name only if possible.