Desert backdrop. Stagecoach silhouette. Driver at the reins, comrade beside him, shotgun in hand, risking the elements, highwaymen, and their scalps to escort your hard-earned funds to the next safe vault. The name's spelled in that font used for movie-Western titles, colored in yellow on red, no less. [Yellow and red: the classic fast-food (and Denny's)-logo color scheme, the Pavlovian bells of restaurant signage.] Combine the images and nothing's more wholesome: it's John Wayne eating a Big Mac and securing your deposits. It's Wells Fargo and its corporate symbol is pure genius.

But that was then, this is now. Riding shotgun used to mean you carried one; today, calling it's just a goofy way to get front-passenger dibs. Let's deal with now.

In Bankruptcy Land, Wells Fargo causes trouble and here's why. Once the chapter 7 petition is filed with the court, the petitioner's property becomes property of "the estate." The estate is your stuff: your known, unknown, contingent, present, future and sometimes even past property and interests. When you file your petition, nobody physically snatches your property, but your property is technically relinquished to the estate, which is owned by a trustee assigned to your case. The trustee becomes the custodian of your property and must determine if your property is finally yours to keep after the bankruptcy. If he or she reckons you have excess assets, then the trustee has the right to sell the property with unreasonably high value, and distribute the proceeds to your creditors. But no fear! The process is not arbitrary. We know what's safe and what's not; we work to ensure you escape potential loss. Usually within a month after we file your chapter 7, the trustee will have made a decision. She'll typically have assessed your property, found we've applied the necessary law to protect it, and she'll abandon her custodianship: the property is then officially yours, once again. It's really no sweat.

Now, until that determination is made, your property must be kept safe: otherwise, creditors might be denied the yields of liquidation. Thus, the trustee requires that throughout your case, you insure your home, car and business. She also expects that your property not vanish. Fair enough. But what happens with property you own that is held by someone else... say your deposits with Wells Fargo?

Cash you have in the bank is part of the estate and the estate is supposed to be preserved for the trustee. Still, after your bankruptcy petition is filed, you must continue to use your bank account. You will withdraw, deposit and conduct your regular transactions in good faith. Yet, if you had, say $50K deposited the date of your filing, then the trustee would expect to claim a good chunk of it. That kind of sum can't just vanish.

Wells Fargo fears liability for the vanishing 50K. Therefore, its policy is to be a custodian for the custodian (trustee). If your balance on the date of filing is around $3K+, Wells will freeze it. All of it. Not even a fiver left to buy lunch. Wells will release the funds only upon the trustee's approval, which could take a month or more. This will happen even if the $3K would be clearly exempt and would clearly be released later by the trustee. If all your money's in Well's, well....

If all your money's in Well's frozen like peas, then you might consider yourself... a stagecoach driver. 'Cept, you're the driver sprawled on the desert floor, six horses and shotgun rider stuck with arrows like so many pincushions. Left for dead with no horse, you'd be starving. Like the bankruptcy debtor who can't pull bills from the ATM and can't buy a loaf of bread.

Though, I guess you could eat the slain horses.

If the freeze policy must stick, then it must also be modified: some funds should remain. If there is 50K in the bank, then freeze 40; not 50.

Is the freezing proper? Wells Fargo cites its case law authority: In Re Calvin and In Re Jimenez; we cite other precedent. In In re Mwangi and Mwicharo (I'm not the one to voice grievances when it's time to pronounce), the Court understated, "Upon reflection, several elements of Wells Fargo’s policy are puzzling... " Will the Supreme Court bother with this trifle? Dunno. But till then, the question remains: who asked Wells to "assist" the trustees anyway? I don't believe the majority of trustees did. Other banks don't follow suit and no one is prosecuting them.

Wells Fargo shoots itself in the foot: it loses liquid assets. Our clients are instructed to empty their Wells accounts before we file: this is the only means to preclude arbitrary freeze. Some of the clients simply close their Wells accounts for good. Consider that children routinely bank with their parents' institutions. Thus, future customer bases are dumped. Wells may be losing lotsa, lotsa money. Nope, it doesn't makes sense. But then, banks have been known to make mistakes... one reason why bankruptcy's on so many tables right now.

What is next? Will your home valuables be placed in similar limbo, commandeered and stored in trustee storage till the estate is abandoned? Probably not; it's easy to freeze bank accounts, but go freeze your rare stamps.... Still... slippier slopes have happened.

Is Wells the only one? Union Bank has an even stricter policy than Wells. There's no apparent threshold amount that triggers their freeze. As with Wells, this policy will cause losses for Union. Not good: they lack even a compelling logo to fall back on and they're tremendously unpopular in the South.

What have we learned today? Empty your Wells and Union accounts before we file your bankruptcy (don't count on a $3K threshold). Since other banks could potentially adopt the policy, it's simply better to have cash-on-hand reserves no matter who your bank is. Additionally, if you bank with a company you owe money to (e.g., holding a checking account with Chase, while you're past due on a Chase credit card), then seek a different bank.

This isn't legal advice and it's strictly opinion that doesn't address your specifics and details.