Is it legal to close out your checking account with ACH outstanding?

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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 11 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.


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