Filed but Citibank is still withdrawing payments?

[SPalin]

I had panicked 4 months ago when things started going south and though I could work with some of my creditors. I contacted Citibank about my situation (loss of income and raise of interest rate to 29%) they offered to close two of the CC (MC and AMEX) reduce the interest to 1% and also reduced the monthly payment, but they required automatic monthly payment by electronic check from my checking account. I filed Chp. 7 on November 2nd, and contacted Citibank on November 9th and gave them my case number and they said that the automatic withdrawal would stop, but it didn't! Payments of $100 and $75 on 11/18 and 11/20 respectively were withdrawn from my checking account at BofA. Will the trustee look at this as insider payments? I will be calling my attorney first thing in the morning, but thought I would check here. I know other creditors have received the Bk notice, because I have received several letters stating the account is closed and distsroy any cards that I have. Will Citibank get into trouble for accepting the payment after the filing?

[StartingOver08]

These are not considered insider payments. They are a violation of the automatic stay. The Trustee can choose to go after those payments (not after you, but get them from Citibank). The payments are so small that the Trustee may not do anything, but let your attorney know right away so he can do what he needs to do.

You should cancel that automatic withdrawal right away. I don't think that filing BK is an automatic cancelation of those payment arrangements you had made earlier. (It ought to be automatic, but you can see it wasn't! )

[SPalin]

Thanks StartingOver08! I just found out yesterday (it caused my checking account to be overdrawn, but BofA paid both payments), so I will calling my attorney 1st thing in the morning! There is light at the end of the tunnel, just hope it isn't a train!

[music12]

citibank violated the automatic stay and technically they should give you the money back. ask your lawyer if he would get them to return you the money plus any fees imposed by BofA for "your" overdrawing your account (trust me, BofA will impose fees!). hope for the best, but i'd be surprised if you get it back. if you do please let us know!

[whipster1]

Your attorney should get some attorney's fees tacked on...probably about a grand if he plays his cards right. My attorney starts drooling when he hears of a big boy bank continuing to withdraw funds after a BK filing.

[SPalin]

Well since I have a pre-paid attorney I will not be charged with additional fees for any aspect of the Bk case and since CitiBank violated the automatic stay it covered per my attorney. I was told by the paralegal to close my checking account, but I have an automatic paycheck deposit and it takes over two months for the State to change the deposit! So my attorney is sending a letter to CitiBank and also filing the issue with the court... might be an interesting 341 meeting 10th of December! I'll keep you posted on this...

[DeadManCrawling]

You and your attorney will prevail on the matter.

BK judges love when big banks, who are, in legal terms, "more sophisticated than the average debtor", do things like this. You will likely get your money back, maybe a little extra on top, and the attorney will get paid by CITI.

If all goes as expected, that is.

Good luck!

[nerves]

We had the same thing happen with a lease payment for our business. That was over a week ago and the lease still hasnt returned the funds. If they are not back in our acct by mid next week, our attorney will play hard ball. He has already sent them a letter and made a call. Good luck to you!

[Mommyoftwo]

We had the same thing happen wtih a local bank. I contacted them and had the payments returned the next day so you'll probably get the money back, one way or another.