July 20, 2018

How to Repair Your Chex Systems Report After a Bankruptcy Discharge

About 25% of the bankruptcy clients I represent have bounced checks due to insufficient funds.  While there can be a criminal law violation if you bounce a check, often merchants do not prosecute unless the amount is significant.  Even if there are no criminal implications, a bad check is most certainly a debt that needs to be included in your bankruptcy filing.

Many merchants use check reporting services like Chex Systems.  Another check reporting service I see frequently is called Telecheck.    These companies are credit reporting agencies just like Equifax or Experian and merchants use these companies when deciding whether or not to accept a check from a customer.

My Bankruptcy Law Network colleague, San Diego bankruptcy lawyer Michael Doan has written a very helpful post that sets out the specific steps that you need to take when you include a Chex Systems or Telecheck debt in your bankruptcy.   You can click on the link to read Michael’s timely post.  Michael notes that the check reporting agencies sometimes do not update their databases to show a “zero balance, discharged in bankruptcy” on accounts that are included in bankruptcy.

A Chex Systems file that show outstanding debt will make it very difficult, if not impossible, to obtain a new bank or checking account after bankruptcy.  If you take the necessary steps to clear your check reporting file, you greatly improve your chances.

Michael’s advice clearly applies once you have received a discharge in Chapter 7 or Chapter 13.   This raises a question in my mind as to what a Chapter 13 debtor can or should do during a five year Chapter 13 plan.   I wonder if a Chapter 13 debtor could argue that a check reporting agency’s refusal to delete a reference to an outstanding balance could be considered as a violation of the automatic stay.  I will pose this question to my BLN colleagues and update this blog post.

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.


  1. Stumbled upon this blog in my search for that very same question about chexsytems and the automatic stay. Any updates on that? I understand the post-discharge stuff, but I too am wondering if this is not a violation of the automatic stay while being in bankruptcy. Any ideas would help alot.

  2. I’m curious if you’ve secured any additional information in relation to Chapter 13 and ChexSystems. I’ve been declined access to a new bank account several times and we are unable to write a check anywhere that uses the ChexSystems. We are 3 years into our Chapter 13 and I wonder about the ‘clean’ start offered by BK. Thank you!

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