Ch. 7 Ruling Protects Banks From Debtor-Account Dilemma

Law360 (May 3, 2019, 2:55 PM EDT) -- On April 25, 2019, the U.S. District Court for the Southern District of New York reversed a bankruptcy court's finding that a bank's imposition of a freeze on a married couple's bank account upon the filing of their Chapter 7 bankruptcy petition, pending instructions from the Chapter 7 trustee, violated the automatic stay.[1] 

The district court held that it was not a violation of the automatic stay to deny the debtors access to funds in the account because, among other things, the funds became "property of the estate" as a result of the bankruptcy filing and were therefore subject to the...

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