Bank Seizing Funds?

[moneyproblems]

We're meeting with our lawyer on Thursday and filing BK7 soon. Our lawyer contacted our Credit Union to discuss our CC and auto loan there- we want to reafirm on our car loan and keep the car. They agreed to our terms for now, but I just recieved a call from our CU saying that they could seize all of our money in our checking account (nothing in our savings) since they knew we were filing soon and we are in default on our CC.
Can they do this? How do we handle this?
We have accounts open at another CU that we can switch all of our money to and we're planning on doing that. Do we leave enough money in our Cu account for the rest of our checks/debits clear and leave? What if they take the money we put in the account before things clear, and it results in the account going negative?
Anyone have any experience with this?

[CATCHMEIFYOUCAN]

Cross Collateralization

YES, they can. What they call "cross collaterization." I had been in a DMP before I filed, and at their suggestion they said close these accounts or leave as minimal amount of money as possible ($5). I couldn't actually close these accounts because I had the CU loan and credit cards tied to them (the CU wouldn't let me close them). So I just stopped using them and opened up a new checking account at different bank unrelated to any loans, credit cards etc. It may be too late for you to get your money out as they know you are filing and may have frozen your accounts, hopefully you didn't have too much money in them? I had $10 in my NFCU savings account, they TOOK $5 of my savings to apply to one of their credit cards! They couldn't take the other $5 because I have to have a minimal balance to keep my savings "alive," even though I've been blocked from using my accounts any further. Basically the credit unions "fire you," (from one post exression I read). They don't offer their services to you any more. So IF it is not too late get what you can out. Someone said if you actually close your accounts, it could be a form of fraud. Just stop using them!

Catchmeifyoucan

[moneyproblems]

Thanks for the info. There's not much in them (thank god I found out today before I deposited my pay check), but what happens if there's no money in the account and something clears the account that hasn't posted yet? Do I need to find all of the places I wrote checks to (all the debit card trans. already posted) and find another way to pay them, or notify them at least that the item may be returned?
Or do I let it clear my bank (they do pay overdrafts) and stick it to the bank?

[LostOne0069]

This actually happened to me! I didn't know that they could do this and so the first indication that I got was when they took nearly $900 out of my checking account just after I had been paid via direct deposit. This nearly made me bounce my rent check and made it so that I couldn't pay the arranged payment plans with several creditors....

I immediately opened a new account elsewhere and moved my direct deposit to that new account. About a week after I did this I noticed on the old account another attempted draft against the checking account by the credit union... they drew my checking account nearly $400 into the negative and then closed it out.

Move your funds to a new bank ASAP!

[CATCHMEIFYOUCAN]

Overdraft

but what happens if there's no money in the account and something clears the account that hasn't posted yet?
ya better make sure they clear, you dont want to get charged for returned check fees, etc .. but than again, you do have an overdraft.

I have an overdraft with Chevy Chase (hmmm am I allowed to post a Bank Name?), well anywayzzz, its a $500 overdraft. When I "zeroed," out my Checking account, I still owed on my overdraft (which I've included in the Bk13). When I knew I was going to file, I went to the bank and told them I was no longer using the checking but I still wanted to pay the overdraft (so that they wouldn't charge me the bank fees for having the checking account). Since I still owed on the overdraft, they changed my account status to a "student account," status, where the checking became free! So I had no worries there of being charged $5-8 bucks for a checking account I never was going to use! SNEAKY !


hmmm, I wear this aka well !
Catchmeifyoucan