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Can a CU take an auto payment during BK?

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    #1

    Can a CU take an auto payment during BK?

    I haven't gotten a reply so Ive reposted with a different title:

    My car payment from a credit union is usually automatically deducted from my checking account. I made sure I haven't had any money in my account since I am discharging that loan. Yesterday they attempted to take my November payment of $498 from my checking account. There was only $23.xx in the account so they took that and show that I owe $474 due 11/1. I don't care about the money but are they allowed to do this? I thought they couldn't touch my accounts or attempt to collect any debt during the automatic stay.
    Filed 10/8/09
    341 11/2/09
    Last Day For Objections 1/4/10
    Discharged 1/5/10
    Tags: None
    #2
    I would think the same rules apply during bankruptcy for CU. Have you called them to make sure that they are aware of your BK filing? The bank although not a CU discontinued my auto payment when they found out about the BK.

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      #3
      No I haven't called them. I don't really want to talk to them. They were included in the mailings. I just noticed the issue now. I emailed my attorney about it.

      I found the following article:
      http://www.************************/...utomatic-stay/

      So I think my CU violated the automatic stay.
      Filed 10/8/09
      341 11/2/09
      Last Day For Objections 1/4/10
      Discharged 1/5/10

      Comment

        #4
        I just checked the address on pacer and I noticed the town is slightly off. It say the town is ____ ____. But it's really ____ ____ Park. The zip is correct though. Now I am starting to get paranoid. What if they didn't show up to my 341 because they didn't know about it...
        Filed 10/8/09
        341 11/2/09
        Last Day For Objections 1/4/10
        Discharged 1/5/10

        Comment

          #5
          I keep reviewing the information and I remember I made a post a few weeks ago about my CU pulling my credit right after I filed. Previously they only pulled it when I applied for 2 loans. So they must have been notified. Bastards.
          Filed 10/8/09
          341 11/2/09
          Last Day For Objections 1/4/10
          Discharged 1/5/10

          Comment

            #6
            I had the same problem. I intend to reaffirm my auto loan so I wanted to be sure payment was properly submitted. I was unsure if my CU would continue to automatically deduct my payment due to the automatic stay and I contacted them to inquire. I asked to speak with the BK department. Following some confusion (I got the feeling a BK department didn't exist), I was informed the payment would NOT be automatically deducted. I paid in person via personal check only to discover my payment was deducted the following day (sufficient funds were in my account)! My attorney intends to address this issue with the CU which will likely occur today as we anticipate the CU attending my 341.

            It appears our CUs are playing by their own set of rules!
            *Filed: September 23, 2009 *341: November 4, 2009 *Discharged: January 4, 2010 *Closed: January 20, 2010

            Hakuna Matata...it means NO WORRIES!

            Comment

              #7
              Since there is no money in the account this is a non-issue for you. Your pre-bk planning worked. Good job.

              Now it's time to stop worrying. They will figure out that the auto-deduct must be stopped. Don't put any more funds in the account unless you intend to keep the car.
              Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

              Comment

                #8
                I agree with the others, if you don't put any more money into that account they will eventually figure it out and the debt will be discharged anyway so I wouldn't worry.
                Filed Chapter 7 (Primarily Business Expenses) 04/10/2008 FICO 468 :cry:
                341 on 05/06/08:unsure:House appraisal on day 63:blink: 07/10/2008 Discharged-Asset Case!!!:yahoo:08/09 Transu 559, Equifax 636, Experian 647
                Case Closed 07/15/2009 :D:yahoo:

                Comment

                  #9
                  I would recommend that either you call the C.U. or have your attorney call them. If it's set up on an automatic payment then it's systematic and will continue until you have them cancel it. Someone at the C.U. will need to go in and manually take it off or it can cause overdraft fees on your checking account if it just continues--regardless of if it gets paid or not due to the attempt to draft.

                  Comment

                    #10
                    Originally posted by OhioFiler View Post
                    Since there is no money in the account this is a non-issue for you. Your pre-bk planning worked. Good job.

                    Now it's time to stop worrying. They will figure out that the auto-deduct must be stopped. Don't put any more funds in the account unless you intend to keep the car.
                    What about cross collateral and the CU overdrafting the OP account?

                    I stopped my automatic deposits from my pay and my automatic loan payment the same day I met with my attorney and spent down my account with my CU to $5.09. On Monday 11/2 they took the 5.09 and applied it to my loan. The $5 was the membership fee. I'm going to now close my account officially.
                    Stopped paying CC: September 2009 ; Retained attorney: 9/9/2009; Filed Chap 7: January 18, 2010; 341 Meeting: March 9, 2010; Discharged and Closed: April 29, 2010

                    Comment

                      #11
                      Originally posted by ace13 View Post
                      What about cross collateral and the CU overdrafting the OP account?

                      I stopped my automatic deposits from my pay and my automatic loan payment the same day I met with my attorney and spent down my account with my CU to $5.09. On Monday 11/2 they took the 5.09 and applied it to my loan. The $5 was the membership fee. I'm going to now close my account officially.
                      They can't overdraft the account. Then they would really be in violation of the stay.
                      Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                      Comment

                        #12
                        In my case they did the same as with ace13, I also had 5.09 in my savings, that was a membership deposit. My HELOC required an automatic payment so I couldn't remove it. All auto payments failed and they kept sending notices. Later they closed the account and applied my balance to the credit card and not the HELOC, I only had auto-pay on HELOC.

                        They probably did that because of cross-collateralization but I think they would not be allowed to overdraft your accounts....
                        Filed CH7 on Aug-06-2009 -- DONE!
                        341 meeting on Oct-01-2009 -- DONE!
                        Discharged on Nov-12-2009 -- DONE!
                        Case Closed on Jun-15-2010 -- DONE!

                        Comment

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