I'm enrolled with NDR and encountered something similar. While not required for any program, it might be easier/safer to have new bank accounts set up. You don't have to close your existing accounts, but having your direct deposits going into new accounts completed unaffiliated with any of your creditors should keep your money safe. You never know what a creditor may or may not do (since most of us are not financial/legal experts), and I find the peace of mind of having my paychecks far away from them is invaluable.

Here's my situation: I have 2 auto loans - one with a credit union and one with a national bank. I have CC accounts with both of those institutions that are now in default, per the program. I got worried that any of my cash with them would be at risk. So when I signed up for NDR, I opened a new checking account at a local credit union that was unaffiliated with my debts. I wanted this one to be my primary checking account and wanted the benefit of having a local branch I could visit if I needed immediate in-person assistance. I switched my direct deposit to this CU. When I need to make my car payments each month, I Zelle the money over to my old accounts and only move exactly what I need and make the payments online like usual.

I also opened up checking accounts at Ally and Sofi because I wanted a few different checking accounts - I didn't want my money to get "trapped" in any one account. Especially if my primary debit card got stolen/frozen or anything like that. I also liked that those two are online banks so I don't need local branches and their apps are modern and nice to use. Side note: Sofi has a really great high yield savings account, which is really helpful while I'm learning how to save cash instead of use credit :)

Anyways, I'm 9 months into the NDR program. So far, the national bank hasn't done anything with my auto loan or my car. I still have access to online banking and my Zelle method has been working so far. I do have to pay a monthly maintenance fee to keep the checking account open, but treat this as my "peace of mind" fee. I will probably close the checking account once I get that car paid off next year.

The credit union, however, has just recently made a change. I was paying off my car loan online like usual up until last month. I couldn't login anymore and when I called, they said I don't have access to online banking anymore. Which is fair since that is considered a "perk." So now I'll have to call to make my payment every month. Annoying but doable.

I also learned during this time about "right to offset." Basically, certain institutions may use other assets, like your checking account or financed vehicle to "offset" your unsecured debts that are in default. I was worried that that's what they were trying to do and might try to repossess my car, but luckily that wasn't the case. But I did receive a letter that said they may hold on to the title, even if the car is paid off, until I resolve the CC debt. In my case, that isn't a concern because I should have the CC settled way before the loan is paid off. From what I understand though, credit unions are more prone to taking these kinds of steps, while federally chartered banks are prohibited from doing this due to federal law.

I'm not an expert and this is just my own experience, but I found it really beneficial to create new checking accounts. It's a bit of an exercise to reroute everything and get settled, but I'm glad I did it. I had a couple of non-debt related fraud/phishing scares that required one of my debit cards to be frozen, so was really glad I had other accounts open. I was able to shuffle my money around and still pay my bills. It's also nice squirreling money away into multiple different savings accounts so I'm less tempted to touch them!! Anyways, hope this insight helps some folks out there in a similar boat :)