diff --git a/src/__tests__/wallet-flow.test.tsx b/src/__tests__/wallet-flow.test.tsx
index 370174c..5259f4f 100644
--- a/src/__tests__/wallet-flow.test.tsx
+++ b/src/__tests__/wallet-flow.test.tsx
@@ -92,4 +92,138 @@ describe("Wallet Connect Flow Integration", () => {
     expect(screen.getByRole("button", { name: /connect/i })).toBeInTheDocument();
     expect(screen.queryByText(/^Sequence$/i)).not.toBeInTheDocument();
   });
+
+  it("aborts cleanly and displays a reconnect prompt when wallet disconnects during simulation (#967)", async () => {
+    const { TransactionPanel } = await import("@/components/TransactionPanel");
+    const ConnectDirect = () => {
+      const { connectWallet } = useSorokit();
+      return <button onClick={() => connectWallet()}>Test Sign In</button>;
+    };
+
+    (mockClient as unknown as Record<string, unknown>).transaction = {
+      estimateFee: vi.fn().mockImplementation(
+        () =>
+          new Promise((resolve) =>
+            setTimeout(() => resolve({ data: { baseFee: "100", recommended: "100" }, error: null }), 100),
+          ),
+      ),
+      submit: vi.fn().mockResolvedValue({ data: { hash: "h1", ledger: 1 }, error: null }),
+    };
+
+    render(
+      <ToastProvider>
+        <SorokitProvider client={mockClient}>
+          <WalletConnectButton />
+          <TransactionPanel />
+          <ConnectDirect />
+          <DisconnectTrigger />
+        </SorokitProvider>
+      </ToastProvider>,
+    );
+
+    await act(async () => {
+      fireEvent.click(screen.getByRole("button", { name: "Test Sign In" }));
+    });
+
+
+    await waitFor(() => {
+      expect(screen.getByLabelText("Destination Address")).toBeInTheDocument();
+    });
+
+    // Disconnect while simulation / preview is active
+    await act(async () => {
+      fireEvent.click(screen.getByRole("button", { name: /sign out/i }));
+    });
+
+    expect(
+      screen.getByText(/Connect your wallet to send transactions/i),
+    ).toBeInTheDocument();
+    expect(screen.getByRole("button", { name: /connect/i })).toBeInTheDocument();
+  });
+
+  it("triggers sequence refetch when transaction fails with tx_bad_seq and resets draft form on account switch (#967)", async () => {
+    const { TransactionPanel } = await import("@/components/TransactionPanel");
+    const addr1 = "GBRPYHIL2CI3WHGSUJGY6O7SROQOMJG7QBCACN4QPKUOQNXJDGONXHPA";
+    const addr2 = "GCEZWKCA5VLDNRLN3RPRJMRZOX3Z6G5CHCGSNFHEYVXM3XOJMDS674JZ";
+
+    vi.mocked(mockClient.wallet.connect)
+      .mockResolvedValueOnce({ data: { address: addr1 }, error: null })
+      .mockResolvedValueOnce({ data: { address: addr2 }, error: null });
+
+    vi.mocked(mockClient.account.getAccount)
+      .mockResolvedValueOnce({ data: { sequence: "100" }, error: null })
+      .mockResolvedValueOnce({ data: { sequence: "101" }, error: null })
+      .mockResolvedValue({ data: { sequence: "200" }, error: null });
+
+    (mockClient as unknown as Record<string, unknown>).transaction = {
+      estimateFee: vi.fn().mockResolvedValue({
+        data: { baseFee: "100", recommended: "100" },
+        error: null,
+      }),
+      submit: vi.fn().mockResolvedValueOnce({
+        data: null,
+        error: "Transaction failed: tx_bad_seq",
+      }),
+    };
+
+    const SwitchControls = () => {
+      const { connectWallet } = useSorokit();
+      return <button onClick={() => connectWallet()}>Connect Or Switch</button>;
+    };
+
+    render(
+      <ToastProvider>
+        <SorokitProvider client={mockClient}>
+          <AccountCard />
+          <TransactionPanel previewMode={false} />
+          <SwitchControls />
+        </SorokitProvider>
+      </ToastProvider>,
+    );
+
+    await act(async () => {
+      fireEvent.click(screen.getByRole("button", { name: "Connect Or Switch" }));
+    });
+
+    await waitFor(() => {
+      expect(screen.getByRole("option", { name: /XLM/ })).toHaveTextContent("100.5");
+    });
+
+    const destInput = screen.getByLabelText("Destination Address") as HTMLInputElement;
+    const amountInput = screen.getByLabelText("Amount (XLM)") as HTMLInputElement;
+
+    fireEvent.change(destInput, { target: { value: addr2 } });
+    fireEvent.change(amountInput, { target: { value: "5" } });
+    await act(async () => {
+      fireEvent.click(screen.getByTestId("submit-transaction"));
+    });
+
+    await waitFor(() => {
+      expect(
+        screen.getByText(/Your account sequence is out of date/i),
+      ).toBeInTheDocument();
+    });
+    // Sequence refetch was triggered upon tx_bad_seq
+    expect(mockClient.account.getAccount).toHaveBeenCalledTimes(2);
+
+    // Return to form and populate draft, then switch active account
+    fireEvent.click(screen.getByRole("button", { name: /new transaction/i }));
+    fireEvent.change(screen.getByLabelText("Destination Address"), {
+      target: { value: addr2 },
+    });
+    expect(
+      (screen.getByLabelText("Destination Address") as HTMLInputElement).value,
+    ).toBe(addr2);
+
+    await act(async () => {
+      fireEvent.click(screen.getByRole("button", { name: "Connect Or Switch" }));
+    });
+
+    await waitFor(() => {
+      expect(
+        (screen.getByLabelText("Destination Address") as HTMLInputElement).value,
+      ).toBe("");
+    });
+  });
 });
+
diff --git a/src/components/TransactionPanel.tsx b/src/components/TransactionPanel.tsx
index c600484..a223509 100644
--- a/src/components/TransactionPanel.tsx
+++ b/src/components/TransactionPanel.tsx
@@ -69,6 +69,7 @@ export function TransactionPanel({
     isLoadingAccount,
     isConnected,
     balances = [],
+    refreshAccount,
   } = useSorokit();
   const [dest, setDest] = useState(defaultDestination);
   const [destDirty, setDestDirty] = useState(false);
@@ -84,8 +85,27 @@ export function TransactionPanel({
   const [isBuildingPreview, setIsBuildingPreview] = useState(false);
   const [estimatedFeeXlm, setEstimatedFeeXlm] = useState(0);
   const abortControllerRef = useRef<AbortController | null>(null);
+  const prevAddressRef = useRef<string | null | undefined>(address);
   const formId = useId();
 
+  // Reset active transaction draft form and abort in-flight operations when switching accounts or disconnecting (#967)
+  useEffect(() => {
+    if (prevAddressRef.current !== undefined && prevAddressRef.current !== address) {
+      abortControllerRef.current?.abort();
+      setDest(defaultDestination);
+      setDestDirty(false);
+      setAmount(defaultAmount);
+      setAmountDirty(false);
+      setMemo(defaultMemo);
+      setState("idle");
+      setResult(null);
+      setError(null);
+      setPreview(null);
+      setIsBuildingPreview(false);
+    }
+    prevAddressRef.current = address;
+  }, [address, defaultDestination, defaultAmount, defaultMemo]);
+
   // Fetch the current network fee estimate once a wallet is connected so the
   // balance check below can warn the user before they submit, rather than
   // only after Horizon rejects an underfunded transaction.
@@ -111,6 +131,7 @@ export function TransactionPanel({
     };
   }, [client, isConnected]);
 
+
   const assetOptions = balances ?? [];
 
   // Derive the effective asset: keep the user's selection while it is valid,
@@ -186,6 +207,9 @@ export function TransactionPanel({
       });
       if (signal.aborted) return;
       if (err) {
+        if (err.toLowerCase().includes("tx_bad_seq") || err.toLowerCase().includes("bad sequence")) {
+          void refreshAccount?.();
+        }
         const message = friendlyError(err);
         setError(message);
         setState("error");
@@ -203,12 +227,16 @@ export function TransactionPanel({
     } catch (e) {
       if (!signal.aborted) {
         const msg = e instanceof Error ? e.message : "Unknown error";
+        if (msg.toLowerCase().includes("tx_bad_seq") || msg.toLowerCase().includes("bad sequence")) {
+          void refreshAccount?.();
+        }
         const message = friendlyError(msg);
         setError(message);
         setState("error");
         onError?.(message);
       }
     } finally {
+
       setPreview(null);
     }
   }