Is it legal to close out your checking account with ACH outstanding?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Is it legal to close out your checking account with ACH outstanding?
I am thinking of working with a payday loan assistance company but they want for me to close out my checking account and open a new one. I have 2 outstanding payday loans and they have ACH on file for the future payment.
Asked on January 17, 2011 under Bankruptcy Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
1) You need to reference any agreements with your bank to see when and under what conditions you may close a checking account. You also need to check the agreements relating to any businesses, etc. who are being paid automatically from that account, to again see what conditions may exist on closing the account. As a general principal, there is no law saying that you can't close a checking account, but the issue will be governed by the contracts or other agreements binding on you.
2) The above said, note that (i) closing the account does not invalidate any amounts currently owed through, under, etc. it; (ii) it doesn't even invalidate any future payments you are obligated to make under any credit, service, subscription, etc. agreements; and (iii) you will have to make sure you are still honoring any/alll obligations as they come up.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.