How are overdrawn bank accounts dealt with in bankruptcy?

The short answer is that overdraft charges are unsecured debt that can be discharged. However, discharging the debt doesn’t prevent all consequences.

When you spend more than is in your account, you’ve actually been extended credit, whether you know it or not. This is an unsecured debt, since all that backs it is your promise to pay (which you may not even feel you made). Unsecured debt can usually be discharged in either a chapter 7 or chapter 13 bankruptcy.

It may not seem like a large amount of money in grand scheme of things, but bankers may pay attention. Like any other potential creditor, they are going to decide if your prior bankruptcy filing makes you a better credit risk or not by ridding you of past debt. However, they also will decide if they want to hold your money on account. Some bankers use systems that track banking history to make those decisions, and not paying overdrafts and instead allowing them to be discharged could be used in making those decisions.

Talk to an experienced bankruptcy attorney about what debts to pay, and when, as you decide if bankruptcy is in your best interest.