Checking Account Advance dischargeable?

[Stilltheone]

Hello all--

I have been lurking here for quite awhile and decided to make my first post.

Question: We filed bankruptcy, chapter 7, on March 22. We listed our US Bank checking account advance in our unsecured debt. Balance is $550 owed.

Our checking account has a zero balance and we opened up a new account somewhere else.

Went to US Bank today to close my checking account and they refused to close it due to us owing on our credit line. I called customer service, they said that tomorrow they will withdraw the $550 from my checking account linked with the credit line...making my checking account -$550. They said the advance is non-dischargeable.

Spoke with my attorney, she says "leave it...after 45 days they will write it off"....

Here's the dilema....we will receive our rebate stimulus via direct deposit on May 16th....it will automatically go to our US Bank checking account.....

What can I do to get US Bank to close our checking account BEFORE May 16th?

Help!



Filed Chapter 7: 3-22-08
341 Meeting: 5-15-08
Last day for objections: 7-14-08

[JollyGG]

The overdraft is dischargable. I have seen lots of people here discharge them. As for the direct depost of the stimulus check. I would be contacting the IRS to see if you can request a paper check or redirect it to your new account.

Unfortunatelly, I don't belive there is any way to force the bank to close that account.

Sorry I don't have better new.

If you have enough exemptions to cover it (or don't mind loosing it to the trustee) and you are ready to file. You could file before the stimulus check comes. That way the bank cannot apply those funds to the overdraft as that would be a violation of the automatic stay.

[KKAB]

StillTheOne, let me know what happens with your US Bank checking account advance. That is my huge worry too, as we have $400 out with them now. When I called asking a general question about closing an account with one out they told me the same thing, they won't cancel if you owe a balance. I despise US Bank and won't feel bad at all over them losing some money.

[Stilltheone]

The overdraft is dischargable. I have seen lots of people here discharge them. As for the direct depost of the stimulus check. I would be contacting the IRS to see if you can request a paper check or redirect it to your new account.

Unfortunatelly, I don't belive there is any way to force the bank to close that account.

Sorry I don't have better new.

If you have enough exemptions to cover it (or don't mind loosing it to the trustee) and you are ready to file. You could file before the stimulus check comes. That way the bank cannot apply those funds to the overdraft as that would be a violation of the automatic stay.

I contacted the IRS yesterday and they basically laughed at me, stating there was nothing they could do to change the direction of the deposit.

We already filed for bankruptcy on March 22. So, because we already filed, the bank is not allowed to use our stimulus check funds when they come in?

We also have 2 credit cards with US Bank, which we are discharging. I'm hoping that once they receive our notice that we filed, they will close our checking account because of our credit cards. Is that also a possability?

[CATCHMEIFYOUCAN]

Sounds like you may lose that check coming from the IRS if it going in as a direct deposit and they can do nothing to stop it! Sorry to hear about that!

But you can get the overdraft discharged! I did when I owed Chevy Chase $500 on an overdraft. They would not allow me to close the account because I owed, btw. I did ask them to change my account so I would not be charged monthly fees for having a checking account with them, she was nice and changed it to a non interest bearing checking account, which alot of banks seem to be offering.

Best of Luck to you, Catchmeifyoucan

[Stilltheone]

Yes, but if the overdraft/credit line is rolled up in my bankruptcy, isn't it illegal for US Bank to take funds out to pay the overdraft balance once I've declared? Doesn't the automatic stay protect me from US Bank going after me and my checking account?

That's where I'm confused.

[lrprn]

Doesn't the automatic stay protect me from US Bank going after me and my checking account? That's where I'm confused.

Yes, after you file the automatic stay does protect your checking account.

However, what has happened to a few of our members is that the money was taken out by the bank/credit union "by mistake" a day after filing, then the filer and their lawyer have to go through the courts to get the filer's money back. You get the money back that the lender took, but it can take several months. Most of us don't have that much extra money in our accounts to wait that process out and still be able to pay our bills on time.

The best thing to do is to start a new account outside the credit union/bank that holds the collaterized account just in case yours is one that likes to play hardball with their members who file bankruptcy.

[schel]

How do you know if it is going to be automatic deposit? We have to file our taxes and want a check not automatic deposit. Is that how?
Schel

[wayne-o]

if you filed your taxes and got your refund electronically deposited into your checking account they are going to use the same method for your stimulus check. If you get a paper check for your refund, your stimulus check will be paper and probably arrive a little later than the ones that choose electronic deposit

[Stilltheone]

Yes, after you file the automatic stay does protect your checking account.

However, what has happened to a few of our members is that the money was taken out by the bank/credit union "by mistake" a day after filing, then the filer and their lawyer have to go through the courts to get the filer's money back. You get the money back that the lender took, but it can take several months. Most of us don't have that much extra money in our accounts to wait that process out and still be able to pay our bills on time.

The best thing to do is to start a new account outside the credit union/bank that holds the collaterized account just in case yours is one that likes to play hardball with their members who file bankruptcy.

I have opened up a new checking account, but my stimulus is still going to go into the old one. What happens with this account is that they automatically take the money out before the direct deposit is posted.

I've emailed my lawyer several times, with no response....I don't care if it takes months, I'm not going to give up my stimulus because of Us Bank!

[Stilltheone]

UPDATE:

On April 7th, US Bank took $500+ from my checking account to pay on the credit line that was included in our bankruptcy, making it negative $500+. I spoke with my lawyer, she stated it was illegal for them to do that. She contacted them and US Bank made my checking account balance zero.

[CindyLou]

thats great news! That means as soon as the check is deposited you can withdraw it!!!!! GREAT NEWS!!!!!!!

[CindyLou]

Oh, reminder...if there is a monthly fee on your acct, be sure there is money in the acct to cover it or you will be hit with overdraft fees when they charge you the monthly fee!!!!

[CATCHMEIFYOUCAN]

Oh, reminder...if there is a monthly fee on your acct, be sure there is money in the acct to cover it or you will be hit with overdraft fees when they charge you the monthly fee!!!!

Speaking of monthly fees, NFCU had the audacity to charge me $3.00 while I was in discharge status because I wasn't making timely deposits. Well duhhh, I filed BK you prevented me from accessing my account! Ohhh I wrote them and told them off, I said how dare you charge my account when you cut me off, how can I possibly make deposits to an account with no access! They cut me a check for $3 !

Chevy Chase, BEFORE I filed I made the rep change my account from an interest bearing account to a non interest checking account so I would not be hit with their monthly maintenance fees of $8 a month. I was getting rid of that checking account anyways, and only kept $5 in the account plus included $500 overdraft I owed on my BK.

Catchmeifyoucan