If your bank account gets closed can you reopen it

One of the most frustrating experiences is when your bank closes your account. It is important to realize that just as you can choose which bank you do business with your bank can also choose not to do business with you. There are laws in place that prevent banks from closing accounts based on things like race, but if you are a poor customer and your account goes delinquent, then it can close your account. As soon as you receive notice that your bank has closed your account, you need to take immediate action in order to be able to continue to pay your bills and manage your money.

If you do not, your paycheck may go to the bank, but you will not be able to access the funds. The bank may keep them to help cover your negative balance, since you still owe them that money. The best way to avoid having your account closed is to avoid a negative balance. Even if your account offers overdraft servicesyou will be paying a lot in overdraft fees, and you may become trapped in an overdraft cycle where more and more of your paycheck goes towards the overdraft fees.

if your bank account gets closed can you reopen it

Keeping a running balance of your account, and spending only the money that you have in the account will protect you from finding yourself in this situation. If you have started an overdraft cycle, you will need to break it. You can do this by cutting back on your spending, and possibly speaking with your bank about a schedule to pay back the fees so you can still afford groceries and to pay your rent during the week. You may need to consider selling something or taking on extra work in order to recover from being overdrawn.

You need to be proactive until you fix the situation. If you have not already, you should set up a bare-bones budget and start putting all of your extra money into catching up with the bank and other bills. Once you are on a tight budget, you should be able to catch up on your bills and begin to plan for future expenses so that you do not overdraw your account. If you have your account closed, it will be difficult to find another bank or credit union that is willing to work with you.

You can use money orders to pay many of your bills, or you may want to try to get by with a prepaid credit card. It can be embarrassing to talk to your job about the issues, but you will need to work out a payment method if your job will only pay you by direct deposit. Some banks may be willing to open a savings account with direct deposit for you until you have established a better overall track record of managing your money in the future. Federal Trade Commission Consumer Information.

Banking Banking. By Full Bio Follow Linkedin. Miriam Caldwell has been writing about budgeting and personal finance basics since She teaches writing as an online instructor with Brigham Young University-Idaho.Banks have the right to open and close accounts at their discretion.

For example, according to a Harvard study, banks closed 30 million accounts that were seen as high risk between and When an account has been closed by a bank, the process of getting it reinstated will depend on the reason for termination, as well as the bank's policies.

Banks can close checking accounts for a wide range of reasons, including a history of bounced checks, a negative balance left unpaid, association with high risk industries, or a simple lack of activity.

In states that don't require banks to provide written notice in advance of a pending account termination, a customer may not find out that an account has been closed until a purchase on a debit card is declined, checks start bouncing or online access to the account is denied. Generally speaking, accounts closed due to the bank's concerns regarding financial risk face more challenges for reopening than accounts that have simply gone dormant or carry a negligible balance for an extended period.

The steps to reinstate a troubled account should be taken as quickly as possible, as banks generally have 60 days before being required by federal regulations to charge off the debt. The first step to take after finding out an account has been closed is to call the bank to find the reason for the closure and how it may be rectified. Banks set their own policies regarding the reinstatement of closed accounts, but getting an account that was closed due to a negative balance will likely a require a deposit large enough to cover the debt.

As an alternative solution, a bank with a policy that doesn't allow the reopening of accounts may allow the opening of a new account after the debt is paid. An account closed after going dormant may be re-opened if an electronic payment or deposit is submitted within a specified amount of time. For example, Commerce Bank will reopen a checking account if an incoming deposit is transmitted within 45 days of the account termination.

Depending on the policies set by each bank, a checking account may be reopened if a deposit of any kind is submitted within a preset time frame. For instance, Fidelity Bank and Trust will close a business account that carries a zero balance for 30 consecutive days.

An account closed for this reason can be reopened at the customer's request if accompanied by a deposit. Once you have reinstated your account, ask your bank representative if the institution will be filing a report with ChexSystems, a service that maintains data on problematic bank account histories of individuals and businesses. ChexSystems keeps negative reports on the books for five years, which may make it difficult to open future bank accounts.

Banks and credit unions report to ChexSystems on a voluntary basis, so a filing a may be avoided if you make that request.

If the bank has already filed a report, ask it to update the record to show that the account has been paid in full. How to Reopen a Closed Checking Account. Share Share on Facebook. Money Made Easier. Please enter a valid email.You only need to read the terms outlined in the deposit agreement you received when you opened your bank account to see just how easily a bank can shut down that account.

The agreement will most likely say that your bank has the right to close an account at any time, for any reason and without prior notice. If this happens, you may or may not have the option to open another account at the same bank or another bank. Common reasons for a forced account closure are too many bounced checks or overdrafts within a certain period, and suspected or confirmed fraud.

These include things such as possessing multiple accounts under a single name, having no employer on record but making frequent, high-dollar deposits and withdrawals, and providing a disconnected telephone number.

The steps a bank takes after closing your account determines your options going forward. Options for working around a forced account closure where the bank reported the actions it took include adding your name to another person's account as an authorized user, finding a bank that offers second chance accounts and resorting to non-bank alternatives.

Adding your name as an authorized user to an existing bank account, usually via a debit cardis not the same thing as a joint bank account. You're entitled to use the account, but do not share ownership or liability. Because the account owner is liable for your actions, misuse on your part can damage the account owner's standing with the bank and his credit profile.

A second chance bank account may be an option if your account was closed for mishandling funds. Some banks offer these as a specific type of account, and others offer second chance accounts as a business policy. However, many come with monthly fees and strict requirements such as maintaining a minimum balance and enrolling in direct deposit. The account might also not offer an ATM or debit card. If you maintain a second chance account in good standing for a certain time, many banks will convert it to a regular account.

According to Bankrate, credit unions are a good starting point in researching second chance options.

If My Bank Account Is Closed by the Bank, Does It Mean I Can't Open Another Account?

A reloadable, prepaid debit card is a common non-banking alternative. Because a prepaid card doesn't allow you to spend more than you have, it can be useful for managing your money and eliminating overdraft and bounced check expenses. However, some cards do come with higher fees than checking accounts, so it's vital to research the available options before making a choice.

By : Jackie Lohrey. Share Share on Facebook. Money Made Easier. Please enter a valid email.Mishandling your bank account can result in serious ramifications. Your bank has the right to close your account after you become overdrawn, but most banks wait before taking that step. Overdraft fees continue to accumulate and, if you do not pay, the bank will eventually act.

Once your account is closed, additional consequences will occur that adversely affect your financial status. It is often difficult to get a new account with an organization once you have mishandled an account with one bank. In most cases, your former bank will have reported an overdrawn and closed account to an agency called ChexSystems.

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This company will maintain a record of your history with banks where you had accounts. Even if you pay off all overdraft fees, you will remain in the ChexSystems database as an individual who had a bank account closed due to mishandling. When you apply to other banks or credit unions for accounts, they might refuse to grant you an account or place limitations on the type of account you can open.

In this case, you might consider opening an account with a bank that offers "second chance" checking accounts. A account that's closed for incidents of overdrafting can result in vendors no longer accepting checks from you. This can happen if the bank reports your history to check-verification systems used by many large and small merchants.

If you write a check in a store, for example, the cashier might be unable to accept it because your name and account information have been reported to a company such as Telecheck or CrossCheck. These national companies keep an electronic database of information regarding a person's check-writing history usually using the individual's driver's license number.

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It is illegal to pass a bad check. If your bank account is closed due to being overdrawn or for any other reason, you cannot continue to write checks on that account.

If you do so, you are subject to legal penalties. A merchant might sue you in small claims court for the amount you owe. If you write checks on a closed account, you might even be arrested and tried for the offense. If you are convicted of passing bad checks, you could face a jail sentence, a fine or both.

The closing of a bank account usually doesn't damage your credit rating. But the reverse is true if the bank that closed your account turns it over to a bill collector because you failed to pay the overdraft fees associated with the account closure. To protect your credit score, you should settle accounts with the bank. Talk to a manager to arrange payments and prevent the debt from going to a collection agency. Lisa Mooney has been a professional writer for more than 18 years.

She has worked with various clients including many Fortune companies such as Pinkerton Inc. Mooney holds bachelor's degrees in both English and biology from the University of North Carolina at Charlotte.

Share It. About the Author. Photo Credits.First Quarter Finance. Banks can and do close customer accounts for a variety of reasons. In general, when it comes to personal checking and savings accounts, there are three primary reasons why a bank may close your account:.

Additionally, there are very few laws and regulations that govern account closure; banks are legally permitted to close accounts for any reason, without notice. However, banks do often send written notice of account closure, and there may be ways to reopen your account or keep your bank from closing it in the first place. Below, we analyze the main reasons that banks close personal accounts and whether or not you can reopen the account in each case.

Banks will mark inactive bank accounts — those that have had no transactions for a long period of time — as dormant and eventually close them because they are expensive to maintain.

if your bank account gets closed can you reopen it

Dormancy is slightly different from account closure in that a dormant account still exists; however, you cannot use it. Dormant accounts are closed to new transactions, internet banking, check requests, etc. After an extended period of dormancy, banks will send the funds in your account whether checking or savings to the state government as unclaimed property.

This can happen after there has been no activity in a dormant account for three to five years.

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If your bank sent the funds in your dormant account to the state, you can reclaim them by contacting your state treasury or unclaimed property office and submitting a claim. Many banks will mark inactive accounts dormant after as little as six to 12 months of no activity, representatives from Chase Bank, KeyBank, and Wells Fargo said. Many major U. You can usually reopen an inactive account by making a transaction deposit or withdrawal within a certain period of time.

Banks are required to contact you about an inactive account before reclassifying it as dormant. That notice will typically include specific information about how long you have to reactivate the account. Once the bank classifies your account as dormant, you can still reopen it. To do this, you will typically need to submit a written request to your local branch.

There are no fees for account reactivation. There are a few ways that you can keep your account from being closed due to inactivity and sent to the state government:.

How to Reopen a Closed Checking Account

When you make transactions and payments from your account that amount to more than the funds in the account, you will overdraw the account, meaning that it will have a negative balance. The length of time your account can be negative before the bank closes it will vary by bank and can be anywhere from 30 days to three months or more. Most banks will charge hefty overdraft fees, and some have limits on the number of overdraft transactions you can make in a period of time.

Our previous research includes specific information about bank overdraft fees and policies. In general, if your account is closed because the balance has been negative for too long, you can reopen it by paying the negative balance, which usually includes your transactions plus overdraft fees for each item that bounced. However, if your account is closed because of a high frequency or recurring pattern of overdrafts, you will likely be unable to reopen it.During these challenging times, we guarantee we will work tirelessly to support you.

We will continue to give you accurate and timely information throughout the crisis, and we will deliver on our mission — to help everyone in the world learn how to do anything — no matter what.

Thank you to our community and to all of our readers who are working to aid others in this time of crisis, and to all of those who are making personal sacrifices for the good of their communities. We will get through this together. Updated: September 27, References. When you open a bank account, the bank is under no obligation to continue the banking relationship, and technically may close your bank account at any time and for virtually any reason. In many countries, they aren't even required to tell you why they've decided to close your account.

If your bank closes your account, you must act fast to uncover the reason and try to mitigate the damage so you can open another bank account as soon as possible. If your bank closed your account, you might be panicking, but try to stay calm and call your bank's customer service number to find out what's going on.

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Usually accounts are closed because you are significantly overdrawn, have had frequent overdrafts, or have bounced a number of checks. Ask for a check for the final balance, which will either be a refund or a fee depending on whether your account is in credit or debit.

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Make sure you transfer any direct deposits to your new account. For more tips, including how to keep your new bank account balanced, read on. Did this summary help you? Yes No. Log in Facebook Loading Google Loading Civic Loading No account yet? Create an account. We use cookies to make wikiHow great.

By using our site, you agree to our cookie policy. As the COVID situation develops, our hearts ache as we think about all the people around the world that are affected by the pandemic Read morebut we are also encouraged by the stories of our readers finding help through our site.

Article Edit. Learn why people trust wikiHow. This article was co-authored by our trained team of editors and researchers who validated it for accuracy and comprehensiveness. Together, they cited information from 21 references.The important thing to remember is to find your voice and invite your customers to engage with you- trust us, keeping it real will go a long way.

if your bank account gets closed can you reopen it

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This prime real estate is found right next to your profile picture so make the most out of this space. How do you do this. Include a link to your Instagram account directly on your website. This will naturally connect your site visitors and Instagram followers so all your loving fans can see the full picture with a simple click. By the way, it goes without saying that you should connect all of your social profiles to your website as well.

Take it up a notch and add the Instagram Feed App for free on your site. This way you can automatically share your Instagram photos and videos, allowing your visitors to discover your beautiful posts straight on your website.

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Just make sure the tone of the post is aligned with your brand. Design a strong visual style Think of Instagram as a digital magazine. Align your voice with your brand Ok. Engage with your followers Everyone needs a little love in their day and your community is no exception. Leave them wanting more with a clear bio One of the first things people see when arriving at your Instagram account is your bio. Include your contact info for future clients (email, location, etc.

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