Keep bank account or move it?

[kjrmom911]

I'm sure this has been asked and answered, but I couldn't find exactly what I was looking for. I am filing chapter 13 (hopefully by next week). I did ask my attorney this, but I'm not sure they are correct. We are including my car in the bankruptcy as secured payment. My loan is financed through the credit union I bank at. How will this be viewed by the credit union? It is going to be paid in full, however through the trustee. Should I be concerned about my account? I use online banking religiously to pay my bills. I'm thinking I should get a new account, although I love my bank and hate to leave. I have successfully paid off 4 other car loans through them.

[ChescoChris]

Included in my filing was a $2200 credit card debt to a credit union where I had my primary checking account. The filing never impacted my bank account, I am assuming because I am paying back at 100% but why take the risk.

Beware of cross-collatoralization and open a new account at another credit union! If for no other reason, once you are living solely on cash and debit cards it is good to have a backup debit card if there is an issue with your primary. Good luck!

[walkthaplank]

Open a bank account where you have no other entanglements. Credit Unions cross collateralize.

[kjrmom911]

Thanks for your replies. This is what I was thinking, but it makes me sad as I really really like my bank and have been banking with them for 10 + years. Sigh..one more thing to take care of.

[lrprn]

You said you have a secured car payment with your credit union, but you didn't mention anything about having a credit card or unsecured overdraft protection program with them as well. Those last two are the areas where banks and credit unions often cross-collateralize to pull the money out of your checking or savings account when one or both are delinquent.

If you don't have a credit card or overdraft protection with your credit union - anything that could be cross-collaterized - then chances are you'll be fine leaving things as-is. Just clear it with your lawyer who is the most familiar with the circumstances of your specific situation. After all, we're just a bunch of helpful, well-meaning, but 99.5% non-bk-lawyer folks on the internet

[kjrmom911]

Correct, no credit card or overdraft. I did talk to lawyer today who advised it would be a good idea to set up a 2nd bank account and leave only about 20.00 in this one and just wait to see how they react. Kind of a pain, but I see his point.

[Pandora]

Open another account... just in case. As others have pointed out CU's are notorious for cross-collateralization clauses. Even though you are paying your car through your plan - you've still filed BK and that in itself may cause the CU to limit your access to online banking activities.

[chicagoed195]

It can be a risk. I had car loans and a share account. For a period of time the credit union deactiviated my ATM card, so I had to physically go to the credit union to withdraw funds. After about six months the card was reactivated and everything has gone smoothly since.

[karrieh]

I had my car loan through BOA and that is our where we have our checking/saving account had no problems. We also have a second account with Wells Fargo and that is whom our home loan is through and haven't had any issues. But then these are both way bigger institutions than a credit union.

[kjrmom911]

thanks for all the advice. I did go ahead and cancel my direct deposit and will be deciding on a new bank/credit union in the next few days. Any suggestions for northern ca? I was thinking Schools Financial Credit union. I also have to remember to cancel my auto withdrawel for my car insurance. Better call them tomorrow. Again, this site has been a tremendous help to me. You guys are great. We are filing on Monday and I am so ready to get started on the next 5 years of my repayment phase.

[walkthaplank]

i am partial to Bank of the West