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

[justbroke]

It must have been

Thanks for the follow-up. I'm very happy for you!

[tobee43]

so g...we all could use a nice piece of pecan pie (please send my diet pie).... and a cup of coffee....about now...

i really can't wait for this to be all over for you!!!

[researchnerd]

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.

This is simply not true. Or it might possibly be, but they're misleading you. You are explicitly protected from repo by the Stay, which goes into effect the moment you file. The only way they can get around that is by having their attorney file a Petition for Relief From Stay. Then they get a hearing with a judge, which normally takes about 30 days just to schedule. IF the judge approves their request, then they can attempt a repo. Maybe they can get the hearing to happen in 45 days, but even if they could, I doubt the judge would approve it this early in the process - especially if you're not behind in payments.

A couple of weeks ago my DH had a call from a "recovery agent" asking when they could come and repo his truck. We are 5 months past due on payments, and were about 30 days post-341 at the time. Our attorney's office called his lender (Bank of America) and informed them that this was a violation of the Stay. BOA apparently had no idea the loan was in BK (??? they were notified by mail, twice) and had listed the loan as a chargeoff, but apologized and assured us there would be no more repo attempts. They also stated that we don't "qualify" (?) for reaffirmation but we were welcome to continue to pay on the vehicle and they'd mark it as paid in full when payments were complete. So -- although a ride-through is technically not available here in GA, that's essentially what they offered us. If your reaffirmation does not get approved by the judge, your lender may offer it if you are current.

My car loan is also past due and the lender is a credit union. They have been more active in our BK, sent an attorney to both of our 341s, and are actively seeking reaffirmation. I would need to catch up on payments in order to do the reaffirmation, and they have provided a dollar amount for this. The lender's attorney called my attorney about 30 days post-341 and threatened to file for Relief from Stay "soon" if they did not receive the reaffirmation paperwork. That was 2 weeks ago and they still haven't done it...at this point I don't think they will bother.

[backtoschool]

This is simply not true. Or it might possibly be, but they're misleading you. You are explicitly protected from repo by the Stay, which goes into effect the moment you file. The only way they can get around that is by having their attorney file a Petition for Relief From Stay. Then they get a hearing with a judge, which normally takes about 30 days just to schedule. IF the judge approves their request, then they can attempt a repo. Maybe they can get the hearing to happen in 45 days, but even if they could, I doubt the judge would approve it this early in the process - especially if you're not behind in payments.

A couple of weeks ago my DH had a call from a "recovery agent" asking when they could come and repo his truck. We are 5 months past due on payments, and were about 30 days post-341 at the time. Our attorney's office called his lender (Bank of America) and informed them that this was a violation of the Stay. BOA apparently had no idea the loan was in BK (??? they were notified by mail, twice) and had listed the loan as a chargeoff, but apologized and assured us there would be no more repo attempts. They also stated that we don't "qualify" (?) for reaffirmation but we were welcome to continue to pay on the vehicle and they'd mark it as paid in full when payments were complete. So -- although a ride-through is technically not available here in GA, that's essentially what they offered us. If your reaffirmation does not get approved by the judge, your lender may offer it if you are current.

My car loan is also past due and the lender is a credit union. They have been more active in our BK, sent an attorney to both of our 341s, and are actively seeking reaffirmation. I would need to catch up on payments in order to do the reaffirmation, and they have provided a dollar amount for this. The lender's attorney called my attorney about 30 days post-341 and threatened to file for Relief from Stay "soon" if they did not receive the reaffirmation paperwork. That was 2 weeks ago and they still haven't done it...at this point I don't think they will bother.

I agree with researchnerd, that the bank was not being fully honest with the OP. If the bank filed the minute they received the bk notice, they might be able to get a relief of stay in 45 days, but that is highly unlikely. I also agree that lenders do not want used repossessed cars back, if the owner is willing to keep making on-time payments on the car. So even if pay to ride is not officially available, most lenders do not want to have to repossess the car and if you are still willing to pay, they will most likely allow you to continue paying on the car.

[tcreegan]

Hi all,

...have a bargin for you, two lessons in one sentence:

BOA apparently had no idea the loan was in BK (??? they were notified by mail, twice) and had listed the loan as a chargeoff,

1) never underestimate the incompetence of a large corporation, be proactive

2) clean up your credit report post BK, never assume it was reported correctly until you see it with your own eyes

Tom in Colo

[justbroke]

Just for some clarity on repossession, relief from stay, and reaffirmation.

First, there for this particular poster, there is an actual reaffirmation in progress. This will take some time and will probably not be heard by the Judge until just before discharge.

Upon discharge, the automatic stay is gone anyhow. This is why Judge's deny relief from stay motions, once the discharged is entered. They deny them as moot,

The credit union would be free to take in rem actions after the discharge without filing any motion for relief from the automatic stay. Of course, this is if the reaffirmation agreement is denied.

So, please don't rely on the belief that a credit MUST file relief from the automatic stay in order to repossess collateral. They only only required to do so when the "stay" is in place. The automatic stay ends upon dismissal, discharge (and abandonment of the property by the Trustee), or the closing of the case, whichever comes first.

She said they could repo 45 days after my filing.

This is where the Statement of Intentions does not indicate Redemption or Reaffirmation. When the debtor doesn't do what they stated in the Statement of Intentions (SofI) within 45 days of the (first scheduled) 341 Meeting then 11 USC 521(a) kicks in.

11 USC 521(a)... handing paragraph...

If the debtor fails to so act within the 45-day period referred to in paragraph (6), the stay under section 362(a) is terminated with respect to the personal property of the estate or of the debtor which is affected, such property shall no longer be property of the estate, and the creditor may take whatever action as to such property as is permitted by applicable nonbankruptcy law, unless the court determines on the motion of the trustee filed before the expiration of such 45-day period, and after notice and a hearing, that such property is of consequential value or benefit to the estate, orders appropriate adequate protection of the creditor's interest, and orders the debtor to deliver any collateral in the debtor's possession to the trustee.

They don't need to file a relief from stay motion when the period expires. I think the bank lady is either misquoted, or she referenced the "wrong" 45-days.

[researchnerd]

Upon discharge, the automatic stay is gone anyhow. This is why Judge's deny relief from stay motions, once the discharged is entered. They deny them as moot,

The credit union would be free to take in rem actions after the discharge without filing any motion for relief from the automatic stay. Of course, this is if the reaffirmation agreement is denied.

So, please don't rely on the belief that a credit MUST file relief from the automatic stay in order to repossess collateral. They only only required to do so when the "stay" is in place. The automatic stay ends upon dismissal, discharge (and abandonment of the property by the Trustee), or the closing of the case, whichever comes first..

Thank you for clarifying! The Petition for Relief from Stay is pointless once the case is discharged.

[JackBondLove]

Hmm ... I did something similar with my Wells Fargo (WF) account, and had no problem. Of course, I only had $0.02 in my WF account on the date of filing. On the day after filing, I did the paperwork to take a distribution from my Roth account to be deposited into the WF account, as well as transfer my fat ($160K!) 401K to a new WF IRA. As I had read here that WF is notorious for freezing accounts, I made sure that there would be no issues with freezing, and indeed, there were none.

[researchnerd]

I read something somewhere (will try to find the source) saying that WF only freezes accounts of people who have $5,000 or more. On the day we filed we had all our accounts at Wachovia (owned by WF) and didn't have a problem, but we only had maybe $400 total in the bank. We've since moved to another bank just in case.

[researchnerd]

Hi all,
...have a bargin for you, two lessons in one sentence:
BOA apparently had no idea the loan was in BK (??? they were notified by mail, twice) and had listed the loan as a chargeoff,

1) never underestimate the incompetence of a large corporation, be proactive

2) clean up your credit report post BK, never assume it was reported correctly until you see it with your own eyes

1) Absolutely...don't get me started on BOA. They have been the most evil of all creditors we've had to deal with in this entire process. Before we filed, they shut down my credit card account because my husband was late on paying his (completely separate) account. I had never missed or even been late on a payment. And their collectors harassed me at work about DH's account, but that's a whole other story.

2) I can't wait to get started on the cleanup! Looking forward to having everything straightened out, and making especially sure that BOA follows the absolute letter of the law.

[Wantmypeace]

I'm confused. How can they freeze your accounts if you have no other business with them? I just opened with a new Credit Union in preparation for filing in February. Are you saying that they *could* freeze my account even though I have no other dealings with them besides a checking and savings account? (This makes me nervous!)

[justbroke]

I'm confused. How can they freeze your accounts if you have no other business with them? I just opened with a new Credit Union in preparation for filing in February. Are you saying that they *could* freeze my account even though I have no other dealings with them besides a checking and savings account? (This makes me nervous!)

Beware of credit unions. Many of them are not bankruptcy friendly and may "freeze" your account(s) and upon inquiry, inform you that they're "holding it" for the Trustee! (Which is a lie.)

I would go to a neutral national bank when you're about to file bankruptcy. Stay away from WF.

Of course, all of this varies based on what the credit union's policy is. Each may behave differently given y our situation.

[janie]

Beware of credit unions. Many of them are not bankruptcy friendly and may "freeze" your account(s) and upon inquiry, inform you that they're "holding it" for the Trustee! (Which is a lie.)

I would go to a neutral national bank when you're about to file bankruptcy. Stay away from WF.

Of course, all of this varies based on what the credit union's policy is. Each may behave differently given y our situation.

Why would the CU be notified of a bankruptcy if you only have a checking/savings account with them?

[justbroke]

Why would the CU be notified of a bankruptcy if you only have a checking/savings account with them?

While most CUs probably don't subscribe to a notification service, many banks do. This notification service is provided via one of the Credit Reporting Agencies or the Bankruptcy Noticing Center if they subscribe in bulk. While a very small CU may not subscribe or care, just be careful is my motto.

I had a bank with a check/savings in it and an "overdraft" line of credit. I did not list them on my petition and not on the creditor matrix. One day after filing, they closed the line of credit and "set off" the balance against my checking account, and froze my checking account.

Again, each may behave differently and it would be the individual credit union policy on how they deal with these things and whether they subscribe to notification services.