If you close the account, you will have a negative balance. Once you re-pay the money and notify Chex Systems, you can open another checking account and not wait 5 years. That is a scare tactic.
While you still owe the money and Chex Systems is notified, you can’t write a check at any store, it will be refused if they use Chex Systems to verify your checking account. I know for sure Sam’s and Wal-Mart and Target use this system.
You should stop the direct deposit, since it is just going to fees. You will need to bring the account up to a zero balance though, or it will be reported and you will have a hell of a time getting anything else done financially. Banks will stay on you for having a negative balance for long.
There is one way around this, when you get your next check, go to another bank and open an account, then close the other and pay on it.