Credit card at the same bank institution.

[ATC]

(1)Has anyone ever heard of this happening:

If you bank or have investments at an institution to which you owe money, on a loan or a credit card, that institution probably has the right under state law to take your money on deposit and apply it to your debt to them.

Thus, if you file bankruptcy owing a bundle on your Big Bank credit card, Big Bank can take the contents of your checking account at Big Bank on the day you file to pay the credit card bill.

So, good planning says "don't have your assets in institutions to which you owe money. "

(2) I live in Southern California and would like to know If I file Chapter 13 am I allowed to put money away for retirement. My employer mathches the 1st 5% that I contribute.

(3) If I include a rental home in my Chapter 13, and I surrender the home, Does the Bank still send me a 1099C for next year taxes. The home is only worth around $120,000 and We owe around $190,000?

Thanks in advance for your advice

[SMinGA]

My understanding - debts discharged in bankruptcy are not taxable as income. So no 1099c.

I've heard the banking bit as 'cross collateralization' and think its primarily credit unions. We did have to open a new account - and change hubby's direct deposit - since I owed ~$2500 on a credit card there. They put a hold on $250 worth of funds in the checking account - it was the balance on the date of filing - and its not worth paying our attorney extra to get it back. If you have not filed yet, might be wise to withdraw funds from accounts where you owe debts.

[ATC]

Thanks for the info. we will file in about 3 months, so It's time to say Bye Bye to BofA.

[mummsie223]

We were advised to open an account at another bank. We owe $$ on a cc at our credit union. We didn't include it in the bankruptcy though. But, to be safe, we opened another account at another bank.

[Lissy]

Yes to #1. This happened to me. I (stupidly) signed up for a BoA credit card as guarantor when the card was actually in the name of my ex-fiance's business (his credit was too poor for him to be able to be the guarantor). When we broke up, he stopped paying. They took $240 out of my BoA personal checking account without even notifying me. This was at a time when I was already struggling to keep up with my debt, so $240 was a big hit. I ended up having to switch banks to one that I do not also owe money to.

[SMinGA]

Mummsie, you can't 'not' include a debt in your bankruptcy.

[mummsie223]

That is how we did it. And, there weren't any issues with it. We included everything else.