Chase Bank and cross collateralization...help?

[AllMyFault]

In CA:
Okay, so my wife and I have credit cards with chase that we quit paying 6 months ago..we are planning a chapter 7.
We also have checking accounts there...2 personal and 1 business account in the name of our LLC

My questions:
Does Chase have a cross collateralization clause? Can they levy funds in the name of the LLC

[nodollarsnomo]

I read over the paperwork that they recently sent me about account changes to my personal cc accounts and nowhere in there was a security agreement section that says they have the right of setoff. However, I was looking over the paperwork for my husbands business card through Chase and it does have a security agreement section that says they will take money out of the business checking account to cover the debt.

I closed our personal checking account with them a few months ago, and just recently stopped paying my Chase cc's.

[sadbutinneed]

I just moved my checking from Chase before filing on Friday. I don't know for sure, but have heard others on the board talk about Chase freezing funds when they learn about your bk filing.

[OutofTime]

I have heard as well that Chase along with Wells Fargo are ones to steer clear from because they will hold your funds after filing. I am in CA as well and closed my WF acct since I have a cc debt with them.

[blessed]

For me, a fresh start meant a new bank too. If you're unsure about the clause, I wouldn't risk an account freeze to find out. Why not set up new accounts so that NO ONE has your account number unless you want them to? Just my 2 cents.

[JackBondLove]

LOL! I have an account with Wells Fargo with exactly $2 in it. They said that they would not be freezing it.

[liz417]

I have Chase (was WaMu at the time) checking and savings, but I also had a credit card with Chase with a $27k debt. I opened a new checking account with WF and moved most of my $$ over. Nothing was ever "frozen" at either account, I also had/have a mortgage with Well Fargo that I did not reaffirm either...I'm in CA too.

P.S. I defaulted for a year on that Chase account before I could file for BK.

[DeadManCrawling]

FYI:

If you have an account subject to set-off or cross-collateralization, the lender can OVERDRAFT the account to the maximum limit, jack the interest rate, and add fees, in an attempt to get more money from you.

If you are filing BK soon, that won't matter, but it can be a shock. I wouldn't let them have the chance, if you can avoid it.

[keptdigging]

Maybe it's business loans only... but I was a little slow moving my funds out of Chase and they took a payment out of it for my business line of credit. That of course left my last two checks on the account NSF, which they covered at $33 each. On paper, I guess that looks very profitable to a bank.

Fortunately, this is just a minor skirmish--there is a time to be paranoid and this is it.

Don't bank where you owe money and then you won't have to even ask the question! Though in my case it took a bit of research to find free checking... I owe ALL the majors.