QUICK HELP!!! Credit Union FROZE my accounts AFTER filing Chapter 7...

[gman]

Ugh! I cannot believe this.

Here's what happened:

1. Filed Chapter 7 on Oct 4th with only $100 in my account.
2. Liquidated IRAs to pay this month's bills on Oct 6 and 7...so my checking balance was a few grand.
3. I have the same credit union for my checking as with my car loan.
4. Car loan payments have been current.
5. Rent was due by the 10th - and I sent my check to my landlord to be delivered on Oct 7.
6. Car payment due on Oct 9th.
7. Other bills due within next 24-48 hours.
8. I am in the 11th District. I found a case in the 11th District back in 2004 where a credit union was found to be incorrect in freezing assets when the loan they handled was current. Link is here: http://www.culegalnews.com/credit-un...nkruptcy-stay/
9. Assuming the case is correct - it is not helping me today - as my landlord has not been paid and checks are set to bounce like ping pong balls!
10. I have left a message with "customer service."
11. I am on hold trying to reach the CEO's office.

WHAT DOES ONE DO TO APPLY PRESSURE TO GET MY FUNDS RELEASED ASAP?

[Freddy03]

I'm sorry this has happened to you but I've heard it time and time again on here to open a new checking account with a bank or CU you have no other business with prior to BK.

[AngelinaCat]

Even though we had spoken with our CU before we filed, our accounts were still frozen, and we were sent the standard 'nasty-gram' in the mail. 'Hub spent a couple of days on the phone with their BK department. We did not want to go to another bank or CU because 'Hub had done business with this CU for more than 40 years. We reaffirmed a car loan and Overdraft Protection--which we intended to do anyway. In the end, all turned out well, and the CU reversed the NSFs which accrued while the accounts were frozen. But we were tied up for about ten days.

[Freddy03]

Even though we had spoken with our CU before we filed, our accounts were still frozen, and we were sent the standard 'nasty-gram' in the mail. 'Hub spent a couple of days on the phone with their BK department. We did not want to go to another bank or CU because 'Hub had done business with this CU for more than 40 years. We reaffirmed a car loan and Overdraft Protection--which we intended to do anyway. In the end, all turned out well, and the CU reversed the NSFs which accrued while the accounts were frozen. But we were tied up for about ten days.

I recently opened a new CU account with one that I have never had any business with in the past. I wonder if they will try to freeze my account also. I asked before I joined and of course they said no but who knows.....?

[AngelinaCatHub]

Yeppers, CU's do that. Whether you are current or not on your car loan, you are cross collateralize. They won't pull the money just freeze it. CU's fall under other banking laws than banks do. They are (assumingly) not for profit organizations. My online services were also cut off. I simply called bookkeeping and told them and they transferred me to their bk department. I expressed my desire to reaffirm all, and on good faith they immediately opened my accounts and put me back online. I was sent the paperwork, and fulfilled my promise. It was not a real problem for us but did surprise us. If you are going to keep the car, attempt to talk to them and give them your intent. They may work with you as they did me. I was and am a long time member though. 'Hub

[ccsjoe]

gman, CU needs to tell you exactly why it was frozen. Skip cust serv and go for officer level asap. They may be pulling a wells fargo on you and demand an instruction from trustee that funds are released. This is why I've always advised that CU's are a wild card, no telling how they'll react.

[gman]

Spoke to the Director of Loss Prevention...

She tells me that even though I've never had a late payment on the car, they have to freeze the checking account to protect the Trustee's interest.

I explained in detail that the funds came into the account AFTER the day of filing and were IRA withdrawals listed on the filing - but she did not care.

She did say they would contact their lawyer to see what could be done and would get back to me today.

Assuming they decide to continue the freeze - WHAT ON EARTH SHOULD I DO in regard to:

1. Getting the funds unfrozen ASAP?

2. Making sure that the worst case scenario of having the protected IRA funds not only not being released to pay October bills - but having it swallowed up by the Trustee as I have already maxed out my exemptions? (Perhaps in a worst case I can say I was transferring the funds from one IRA to another???)

What a freaking mess. I definitely should have opened a new bank account and deposited the IRA $$$ there and none of this would have been a problem.

You cannot unscramble an egg though...

[tobee43]

g!!!!!!!!! come on now....i told you NEVER poo where you EAT....and hate to be so unlady like....however, CU's always do this!!!!

the very first thing we did was remove all monies from our bank...paid cash for bills. until it was safe...although we opened another checking account with just a very few dollars in it.

you filed...there should be a stay in effect....they have no right under the stay to do a thing....so you need to go down there i think...forget the phone...face to face is usually the best with a copy of your docket number and filing date and they are in violation...also call the court clerk and find out some options...many times the trustee's office is good about helping ...sometimes NOT...

PLEASE G...don't make me go to georgia today....i was going to relax and take it easy...now i'm so upset!!

[ccsjoe]

gman, if they are mirroring wells fargo practices, which sounds like they are from what you were told, they will need an instruction from your trustee to release the funds.

[Freddy03]

Yeppers, CU's do that. Whether you are current or not on your car loan, you are cross collateralize. They won't pull the money just freeze it. CU's fall under other banking laws than banks do. They are (assumingly) not for profit organizations. My online services were also cut off. I simply called bookkeeping and told them and they transferred me to their bk department. I expressed my desire to reaffirm all, and on good faith they immediately opened my accounts and put me back online. I was sent the paperwork, and fulfilled my promise. It was not a real problem for us but did surprise us. If you are going to keep the car, attempt to talk to them and give them your intent. They may work with you as they did me. I was and am a long time member though. 'Hub

Oh ok - I don't have any loans with the new CU. Just standard checking. I do have a back up checking account with another regular bank that I too, have no loans or credit cards with.

[gman]

there should be a stay in effect....they have no right under the stay to do a thing....

is there any case or law that i can "use" for pressure here?

[gman]

gman, if they are mirroring wells fargo practices, which sounds like they are from what you were told, they will need an instruction from your trustee to release the funds.

Should I simply call the Trustee myself and ask? (I filed Pro Se.)

[gman]

Off topic:

To add insult to injury - the Director of Loss Prevention tells me that her Loss Prevention rep gave me incorrect information last week when I called in about a "ride and pay" if my reaffirmation agreement on my car did not go through (if the judge denied it as I have negative income on Schedule J.)

She said they could repo 45 days after my filing. Right around my 341 hearing date.

[ccsjoe]

Should I simply call the Trustee myself and ask? (I filed Pro Se.)

Yes. Call the trustee's office, explain what the CU told you ad verbatim, explain the predicament and ask for help. As to the legality or not, quite frankly right now you have no time for debates with legal since you're under a tight "meet my bills" deadline.

[justbroke]

If you filed pro se, I would start drafting an Emergency Motion for Entry of Order to Show Cause. That way, you have it ready for tomorrow. You'll need to follow your Court's emergency procedures, and that may include calling your Case Manager and/or your Judge's deputy (courtroom clerk/deputy). Simply filing an "emergency" motion doesn't always get you an immediate hearing... you actually have to schedule it! These can sometimes be telephonic.

If that IRA was in the same bank, then the bank may still be confused about how to proceed. This is probably why they are referring it to counsel. You may want to remind the Bank's attorney that Well's Fargo was spanked for this same exact thing. Wells Fargo, and banks, have absolutely no right to freeze money in anticipation of the Trustee wanting it. Only the Trustee can request such and it's done by court order. Inform them that it's a violation of the automatic stay under 11 USC 362 and that you're proceeding with an Emergency Motion for Entry of Order to Show Cause and for Sanctions. That should wake them up.

IRA funds are protected and since you did this "post-petition", those funds would still not be part of the Bankruptcy Estate. Again, I'd be preparing my motion and be prepared to file it today or early tomorrow. Make the appropriate phone calls. Make sure you have their attorney contact so that you can serve the emergency motion on them.