AndreyPopov/iStock/GettyImages A check account provides many consumers with a convenient way to pay bills and make purchases ; however, checking accounts do come with some degree of gamble. Overdraft fees, monthly fees, bounced checks and returned payments can result in an overdraw bill. If you have a check bill with a minus libra, the bank normally wo n’t let you close that account until the symmetry is in positive territory .
Significance of a Negative Balance
According to the Office of the Comptroller of the Currency, banks generally do n’t close accounts that have a negative remainder, indeed even if you request the settlement of the account while it ‘s in a negative condition, chances are the bank will not honor it. A damaging balance indicates that you owe money to the bank .
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If the account is overdraw due to overdraft fees, you may be able to request that some, or all, of the fees are removed. The savings bank may comply if the account had a good history up until that point ; however, if your bill has a history of veto balances, the deposit may be less tend to remove any fees for you .
Considerations Before Closing an Account
The bank will require you to bring the report to a plus status to close it, either by making a deposition into the score or transferring funds from another account into the bill with the negative symmetry. Any externally initiated deposits, like send deposit from your job or Social Security benefits, will besides contribute to lowering the negative balance, since the bank will apply all newly deposited funds toward the negative balance wheel first. You want to bring the report current a soon as potential to avoid an increase in the negative counterweight.
ad To close out your report once you ‘ve brought the score plus, you ‘ll need to fill out a completion form. You may need to obtain this shape in person, but some banks, like the Chase account closing form, can be found on the company ‘s web site. That means you can print it out, satiate in the want information and chain mail it in when you ‘re done .
Consequences of a Negative Balance
If you allow your bill to remain negative for an extend period, the savings bank may unilaterally decide to close the account. This will not relieve you of the fiscal obligation. In fact, it can make the situation bad .
ad The savings bank will report the account to ChexSystems, which is the credit report agency for fiscal institutions. Most banks check the ChexSystems database before opening a new check account and will not open an account for you if you have a record in ChexSystems, even if you ‘ve paid the sum owed. Consumers reported to ChexSystems remain in its database for five years .
Warning on Neglecting Negative Balances
The bank may place an unpaid balance with a collection representation. A collection agency will report the account to the credit agency. collection accounts are a negative cross off on your report and can lower your credit score. Depending upon the dollar amount owed, the solicitation means may decide to sue you to obtain a judgment, which gives the agency the right to garnish your wages or set a lien on your property, depending upon the laws of your state.
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