Problem with Credit Union Relationship?

[backontrackOH]

Can a credit union refuse to pay a dead member's estate executor if that person owes the credit union money?

My wife and I are in financial trouble. I will soon be filing chapter 7. We are aware of the +/-180 day inheritance clause and have chosen to hold off on my wife filing due to her father's recent death. She is the executor of his estate and beneficiary of his life insurance, and she will also be receiving an inheritance. We are not trying to hide or keep the inheritance as much as trying to make sure her brothers and sisters receive their fair share of the insurance proceeds and inheritance.

What has me worried is the creditor we owe the most money to (outside our mortgage) is the credit union her father kept his savings at. Could they refuse to give my wife her father's savings because she owes them money? Is the credit union paying 'her father's estate' or 'her'? What is the best way to protect this money until it can be used to pay his final expenses and divided amongst the family? Should she put it in an account under her name? As executor, can she sign it over to another family member?

Any help is greatly appreciated.

[lrprn]

I'm so sorry for your family's loss.

Can a credit union refuse to pay a dead member's estate executor if that person owes the credit union money?

Unless your wife's name is on her father's account as a co-owner, there's no connection between her debt and your father-in-law's money in the account.

What is the best way to protect this money until it can be used to pay his final expenses and divided amongst the family?

Unless the inheritance can be completely protected by your state's bankruptcy exemptions, your wife needs to hold off filing at least until the funeral costs are paid and the remaining money is distributed according to her father's wishes.

Should she put it in an account under her name? As executor, can she sign it over to another family member?

Did your father-in-law leave a will specifying how the money is to be distributed?

Any amount of cash in an account owned or co-owned by your wife that can't be protected by the bankruptcy exemptions in your state could be at risk when your wife files bankruptcy.

This is not the normal pre-filing situation so sound legal advice from several experienced bankruptcy lawyers is your best option. Most give free or low cost initial consultations. Gather up your questions including all those asked here and make those appointments. Hope you'll come back and let us know what you find out.