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The lender took money from my account after I file for bankruptcy. Can i file a claim with the bank to get the money back?

San Jose, CA |

I called the lender to let them know that I have filed for chapter 7 and gave the case number. They were supposed to automatically withdraw money from my account the day after I filed. I informed them but they mentioned they had already submitted to the bank to get the money, so they could not stop it. I am planning to file a claim with the bank under pretense that they were not supposed to take the money any longer. They took $500 which I did not have in the account but the bank paid it anyway. Now I owe the bank along with the fees associated.

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Attorney answers 4


From the facts you have given, it appears the lender may have violated the automatic stay that went into effect the minute you filed your bankruptcy. I would suggest following up with the lender by sending them a copy of your Notice of Bankruptcy Case Filing that you would have received from the court clerk (or just a copy of the face page of your petition, showing the case number) and a letter stating that the withdrawal was in violation of the stay and asking for the return of the money that was taken (you can try to get them to refund the overdraft charge as well, but that might be more difficult to get since the reason for the overdraft wasn't entirely their doing - arguably). They should then send the funds back to you. Of course, since all of your assets become the property of the bankruptcy Trustee as soon as the case is filed, the lender may instead return the money to the Trustee. Assuming these funds were in an account you disclosed on your Schedule B, and exempted on your Schedule C, then as soon as the Trustee confirms your claims of exemption are proper and there are no non-exempt assets available for creditors, then he/she should return those funds to you. That will usually happen just after the conclusion of your 341(a) Meeting of Creditors right after the Trustee files their Trustee's Report of No Distribution. All of that should happen within about 30 days after you filed.


To recover funds taken after you filed, you would submit a motion to the court for recovery of the funds and for an "order to show cause" against the bank and the lender, and then ask for sanctions on top of that.

If you used an attorney, they should be able to handle that and make some money from the court's order of attorney's fees and costs.

Clark County, Nevada practitioner.

Orfelia Maria Mayor

Orfelia Maria Mayor


I would try to get the bank to return the money first by showing them that it was post-petition. IF that doesn't work, then absolutely file a motion with the court and ask for sanctions.


The lender violated the automatic stay and pursuant to 11 USC 362(k), you are entitled to recover your damages, which include your attorney fees. So if you do not have an attorney yet, get one that knows the law to bring an action against the lender.


This was not a willful violation of the automatic stay and sanctions would not be likely. Your first step is to contact the "lender" (with a copy of your Notice of filing your BK) and demand that they return the funds taken post-petition. If they refuse, now we're talkin' attorney fees for filing the appropriate motion or adversary proceeding.
Filing a claim with the bank would be pointless.

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