What happens to your safe deposit box after you declare bankruptcy?
Jan Meriss Alfonso Assistant at Ascent Law LLC If you are considering bankruptcy, you may wonder what happens to your safe deposit box. The answer to this question depends on the bank that holds your account. Because FDIC insurance only covers insured deposits, your box may be uninsured. However, there are options available for those who wish to gain access to their safe deposit box. Uninsured deposits are not covered by FDIC insurance Usually, a bank's insurance policy does not cover uninsured deposits. However, if the bank fails, the FDIC steps in to pay depositors. The agency will either give depositors new bank accounts at another insured institution, or issue a check, depending on the amount. In either case, the FDIC will pay out the insurance amount minus any penalties. The FDIC has created rules to protect depositors and the banking system. These rules protect deposit accounts from loss through bankruptcy. The FDIC's policy covers up to $250,000 per depositor, and the ...