Can Banks Place Holds on your Accounts?!

[newbeginning]

HELP.

I just discovered that my current bank, to which I have CC's in default, has placed holds on my checking account of over $6000. This money was to be used for taxes, mortgage, utilities until such time that I would be able to go forward with chapter 7.

Is there anyway to retrieve this? I was given no warning...

[keepmine]

It's called a setoff and if you agreed to it in the account forms you signed when you opened the account, it's legal.
Never keep an account open if you're in default on a loan with that bank.

[FreshLikeADaisy]

Newbeginning, you're getting responses on your other thread too, FYI.

[CindyLou]

They must have a cross-collaterization clause. Is this a credit union or a bank? How much do you owe on your credit cards with this bank?

Are you sure they do not have a judgement already. I know you said your wife had been manging the finances and is now very ill. (I'm really sorry to hear that, BTW). How past due are the credit card accounts?

I am going to guess that its one of these four things:
1. There is a cross collateralization clause on your account stating that if you default they can take your share account (common in most credit unions)
2. They have frozen the money and are planning to file a lawsuit in the next few days. (banks can freeze accts pending a judgement..but can't take the money until they have the judgement...its rare but they can do it.
or
3. They already have a judgement that you are unaware of.
4. The account has been frozen and tagged for closure and they intend to send you a check for the balance (this happened to me. Wells Fargo checked my credit, saw a chexsystems entry from another bank and also my BK and froze my acct pending closure. they did however, keep it open and unfroze the money after a week.)

Did you call the bank and ask them? You should be able to call the 24 hour line and ask them why the account was frozen. There is usually some type of note on the acct. Call and check and let us know. Good luck. I know this is very hard.

[CindyLou]

Oh, one more very important question for the bank. Ask them what happens to checks already written. When Wells Fargo froze my account for closure they said they were still honering all checks that had been written as well as already authorized debits as long as the account had money (and it had over $4000)

[krielly]

Shortly after we filed in Oct 05, I found out the Credit Union had frozen my checking account, and I had a balance of about $2000 in it at the time. Half of that was for my mortgage payment. Man was I PO'd, and concerned about how I was supposed to make my mortgage payment. Turns out I had signed a cross-collateralization agreement when I opened my account. Wish like heck I had known this could happen when I filed. If I had known about these forums back then, I could have saved myself by withdrawing the money before we filed.
Turns out it was entirely legal. UGH! We got VERY lucky, because somehow my attorney got the 5K we owed the CU through as "secured debt". Once the plan was modified to list the CU as "secured", the CU released my money and I was able to pay my mortgage payment. They had me over a barrel. If they remained as unsecured, they would have only gotten about 35% of their money back, but they wound up getting 100%. The only good thing which may come out of this, is that I might be able to re-establish credit with them after discharge (because they got paid off at 100%). There is no guarantee, they said, but if they had suffered any type of loss, I would NEVER have been approved from them for any type of credit in the future.

I think we got REALLY lucky that it was approved as secured.........

K

[newbeginning]

This sucks! No one at Bank of America seems to know exactly why my funds are on hold????!!!!! Speculations is that recent deposit of cashier's check/money order may be the issue. I explained that I needed that money for mortgage, etc. NO HELP. ONLY I'M SORRY, BUT...

[newbeginning]

Man o' Man, if it's not one thing it's another...i feel bad about using you all for a sounding board...just found out that my wife had written a bad check ($20) and it will cost us close to $250 in fines and fees. And I will need to appear in court to explain why she is unable to...what else is going to come out of the woodwork?

Still...not angry.

[emoney]

Your attorney should have helped you with these issues in pre-bk planning.
One thing I learned was to claim all bonus or rewards points with cc before filing. They will close accounts and you forfit all rewards that you have not claimed.
regards,
emoney

[newbeginning]

Hey, folks! All is well. It was a routine hold on some out of state checks, etc. PHEW. I promptly withdrew the majority of the money (some bills still need to be paid, so kept it open until mid-january).

[lrprn]

Hey, folks! All is well. It was a routine hold on some out of state checks, etc. PHEW. I promptly withdrew the majority of the money (some bills still need to be paid, so kept it open until mid-january).

Glad everything worked out for you and all is well, NB!

[makuls8]

My credit union deposited $600 in escrow overage into my savings and now will not release. I find it convenient that they made the decision to deposit versus sending us a check for the overpayment. No transactions allowed they said however, they take all the deposits they can and want.