Why do I lose money if my bank goes bankrupt?
Jan Meriss Alfonso Assistant at Ascent Law LLC You may be wondering why you lose money if your bank goes bankrupt. Fortunately, the chances of this happening are extremely low. However, there is a chance that your bank will make bad decisions and end up losing money - and you may not even know it. In case this happens, you can rest assured that the United States government will reimburse a large percentage of your loss. Deposits are frozen If your bank goes bankrupt, they are legally able to freeze your deposits, which they can use to pay your debts. The Bankruptcy Code gives the bank the right to do this and the US Supreme Court has held that it doesn't violate the automatic stay that applies to bankruptcy. If your bank freezes your funds, they're most likely gone for good. First, you need to find out why the bank has frozen your account. You can get help from a lawyer if you aren't able to reach an agreement with the bank on your own. A bankruptcy lawyer ...