Personal Finance

Opening Bank Account if you owe the bank money

  • Last Updated:
  • Feb 21st, 2021 7:12 am
[OP]
Deal Guru
Oct 27, 2003
14226 posts
4734 upvotes
Toronto

Opening Bank Account if you owe the bank money

My friend wants to open a personal Chequing account at CIBC.

He owes the bank a few thousand dollars in unsecured credit card debt. No payments have been made on the debt in over 4 years and it has been transferred to multiple collection agencies. They never sued him or got a judgment.

When does a bank 'wipe the slate clean' if the customer wants to deal with them again?

If anyone knows how the Canadian banks generally deal with this, please post!
10 replies
Sr. Member
User avatar
Jun 25, 2008
605 posts
316 upvotes
He's probably blacklisted. They'll at minimum ask him about it, and likely even if they allow him to open an account he'll have full delay deposit holding with $0 immediate available, and no overdraft.

Why does he want a CIBC account? There are other banks without the history.

Ha, and even if he opens it, they could conceivably seize any funds at any time to repay the stale debt, no?
Deal Fanatic
Dec 24, 2005
5632 posts
1358 upvotes
he will never be able to borrow with CIBC
so there will never be a clean slate
Member
Oct 28, 2013
365 posts
310 upvotes
Toronto
They will never wipe the slate clean, he'd best go open an account elsewhere.
Deal Addict
Jan 19, 2017
4101 posts
2330 upvotes
Kurtz7834 wrote: My friend wants to open a personal Chequing account at CIBC.

He owes the bank a few thousand dollars in unsecured credit card debt. No payments have been made on the debt in over 4 years and it has been transferred to multiple collection agencies. They never sued him or got a judgment.

When does a bank 'wipe the slate clean' if the customer wants to deal with them again?

If anyone knows how the Canadian banks generally deal with this, please post!
He can open an acct either other banks. Why CIBC again? Some new acct opening promotion?
Sr. Member
Mar 14, 2014
745 posts
879 upvotes
Surreal! I would never walk back into a CIBC branch to try and open an account after screwing them out of a few thousand dollars and having the default sent to collections.
Deal Addict
Sep 14, 2012
1275 posts
872 upvotes
Montreal, QC
Kurtz7834 wrote:
When does a bank 'wipe the slate clean' if the customer wants to deal with them again?
Banks are under no obligation to accept any customer or do business with any customer. As long as they aren't discriminating based on age, race, and/or gender, there is nothing that a customer can do to "require" a bank to do business with him/her. Banks have even told current customers that they don't want to do business with them any more and asked these customers to move their accounts to another financial institution.

That being stated, I'm not sure why your friend wants to deal specifically with CIBC when there are 4 other "Big 5" banks and a lot of smaller and online only banks. Did he find that they didn't bother him too much about his outstanding debt and he wants to do it to them again?
Deal Fanatic
User avatar
Jun 19, 2001
8608 posts
2288 upvotes
That is wrong " As long as they aren't discriminating based on age, race, and/or gender, there is nothing that a customer can do to "require" a bank to do business with him/her. ". They (chartered bank) are required to, unless

"Reasons why a personal account may not be opened
A bank does not have to open a personal account for you if:

It believes that you plan to use the account for illegal or fraudulent purposes.
You have a history of illegal or fraudulent activity in relation to financial services providers within seven years prior to your request to open the account.
It believes that you knowingly made false statements in the information provided.
It believes that opening the account would subject other customers or employees to physical harm, harassment or other abuse.
You refuse to consent to the bank verifying the identification presented or whether any of the above conditions apply.
The request is made at a branch or point of service where the only accounts offered are linked to an account at another financial institution.
If the bank cannot open the account, it will advise you in writing and provide you with information on how to contact the regulator."

Granted, for the op I would be worried about "You have a history of illegal or fraudulent activity in relation to financial services providers within seven years prior to your request to open the account"

not a problem if he has declared bankruptcy "If you have been bankrupt, you will generally be able to open an account as long as there is no evidence of fraud or any other illegal activity in relation to the bankruptcy."

You can confirm that here https://cba.ca/opening-a-bank-account
Deal Expert
User avatar
Jan 27, 2004
44656 posts
7750 upvotes
T.O. Lotto Captain
@ anytime they could exercise the right of offset.

So he might be getting his paychecks in one day. Then boom they take all the money to pay his debts.

Ghetto style finance... go bank @ another bank. That way they can’t debit his account.
Go on the run!
Sr. Member
User avatar
Jul 16, 2019
953 posts
967 upvotes
zoro69 wrote: The request is made at a branch or point of service where the only accounts offered are linked to an account at another financial institution.
I don't understand this one. What does it mean?
Deal Addict
User avatar
Dec 12, 2006
4338 posts
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Messed Up Area
Any bank, including CIBC, may take money owed for debt out of your account if you owe any of the bank brands services money.

So when freind puts a deposit, at random, they can come in and take all or portion to pay off there bad credit card debt with them.

It's legal, unless you have settled with debt collectors, or have the old debt settle in a bankruptcy.

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