Help:( Checking Account Line of Credit???

[sac42375]

I have a $500 line of credit with my bank. It was opened over a year ago. I am getting ready to file September 3rd. It is listed as my second source of funding on Ebay and was used 3 months ago. It has a balance of $400 on it. I never closed it out because it was opened at the time I opened up the checking account as a source of overdraft protection. I am sooo worried this will affect my case.

[SMinGA]

Should not have an impact on filing - but it is a debt, and as such will be discharged. It may or may not affect your checking account. (Your bank might decide to close it or freeze it.) Would not hurt to go ahead and open an account now, somewhere that you don't have any debts, to be safe.

[sac42375]

but does it matter that it was recently used?

[SMinGA]

Based on the amount & time line you mentioned, it probably won't matter. If the amounts are small and/or for basic things, its not likely to matter. Big transactions like jewelry, vacations, cash advances: could raise flags.

Don't use the account any further. Doublecheck to be sure all autodrafts are stopped.

[ccsjoe]

sac, we switched banks in preparation for filing and just realized that our new checking came with a $500 LOC. According to our attorney, as long as the balance is $0, he will not include it in the filing as a creditor. However, that is no guarantee that the bank, once they find out you filed, will maintain the LOC open or freeze your account.

As far as recent use, you state you pulled $400 3 months ago. This should be ok as it is under $600 and pretty close to the 90 day guideline.

[catleg]

For cash advances the lookback is only 70 days and the threshhold is $825 or maybe even higher after the 4/1/10 adjustment.

[sac42375]

So... I read somewhere on the forum that Navy Federal Credit Union will automatically close out your accounts once you file.. Is this true? I didnt list the line of credit as a debtor? NFCU is not our main checking account. My husband has had an account with them since he got out of the military. I opened one when we first decided to file (which was over a year ago). We decided to go with a local more convenient Credit Union instead but never closed out the NFCU. My husband's father (who passed away a few years back) was in the Navy and belonged to NFCU for years. My husband wanted to keep the accounts in memory of his dad. So I am just wandering if the Line of Credit ( $400) will automatically be included in the BK or should I just go ahead and pay it off before our 341 hearing. I am so confused on how this will affect case. Please help..

[catleg]

You can certainly pay it off since it's below $600.
Credit unions tend to be frisky during BK cases since in theory the mgmt represents the members not just some distant don't care shareholders.
I would suggest paying it off and possibly closing the line of credit if you wish to keep the account relationship with them.