Secured vs. Unsecured Debt?

[TomD]

I have a checking account that has an overdraft line of credit attached. My current balance on this is $1500. When I went 60 days with no payment, they hit my primary checking for the minimum balance due. I'm assuming that this makes it a secured account. Do you concur?
Thanks,
Tom D.

[FilingOnMyOwn]

Nope. You can put your money into a different bank and the original bank can't debit your payments from that.

[Minnymouth]

Note, some of the bank accounts that extend an overdraft line of credit state (in the fine print) that should you default on this line of credit they can freeze your account with funds in it or they can seize funds from your account to pay this credit line. Depends on the bank.

Also, some will not let you close your account out until this line of credit is paid in full.

You can list this on your petition as a unsecured debt and get it discharged.

[SinkingFast]

Just an FYI for you Tom,..............

Don't post the same question multiple times in multiple areas of the Forum. You're getting answers on the other post that are applicable to your situation. It would be nice for current readers and future posters to get all the answers in one place.

TYVM!

[anonymuse]

Note, some of the bank accounts that extend an overdraft line of credit state (in the fine print) that should you default on this line of credit they can freeze your account with funds in it or they can seize funds from your account to pay this credit line. Depends on the bank.

Also, some will not let you close your account out until this line of credit is paid in full.

You can list this on your petition as a unsecured debt and get it discharged.

I guess I'm in that situation too. However, I have $1000 overdraft protection/credit (owe about $350 on it)--but, I have my Home Equity Loan (which I have never missed a payment on) through the same credit union. Just so things don't get sticky, is it better to put them as secured debt?

When I get my paycheck once a month, the first thing I do is payoff the overdraft loan at the beginning of the month, then pay off all my bills (and hope there aren't any more bus strikes or gas increases and try to make it to the end of the month in the black). But it seems that at the end of the month, it always dips back into the red.

When I'm paying off my overdraft protection/credit, is this showing preferential treatment of one lender?

[SinkingFast]

Yep, it can.

If you pay over $600 total to that CU in the 90 days prior to filing BK, it could be considered Preferential payments.

Nothing for you to worry about tho. It's between the Trustee and the CU to settle up on that issue.

[aa06a47]

Hey SF, I was reading on another thread that the more than 600 was only for "old" debt. I do not know how they define "old" debt, but I took it as if you charged a grand on your CU credit card and paid it that month (balance off) it wasn't an issue. Has anybody heard of that before? Guess it doesn't matter, it is for the trustee and CU to argue over.

[LostOne0069]

My attorney explained to me that the "preferential debt" thing only counts if you're behind on that loan too...

For instance, in my case, I have a personal loan that I owe to a relative and I have never missed a payment... which is $250/month. My credit cards, on the other hand, I am now behind on from 1 to 4 months, depending on the card. I asked my attorney if they were going to go to that family member and take back the payments and he said that they would NOT. The only way that they can do that is if I had been behind on the family debt also... and then paid them a payment and made no payment to the other creditors. As long as I have always been up to date with the family loan, there is no problem. The only exception to this is if I had made more than the normal payments to him in the last few months since I started falling behind on the credit cards. THAT could be a bad thing.