Credit Card and Checking Acct at same place...

[auttienkassiemo]

My husband and I have a meeting with two attorneys next week and we will most likely ask this question, but I thought I'd post the question on the board and see what all your opinions were on it...

We have a credit card that has a balance of $5000 dollars on it with our credit union. We also have two auto loans with our credit union as well as an overdraft account with a balance of $150 dollars. Right now we are current on all of those balances (not so much all the other credit cards, etc.). I'm afraid that if we get behind on this balance or that they find out we are filing for bankruptcy they are going to want to take the money out of our checking account because we also bank with them. Our checks are set up as direct deposit for biweekly fridays. Obviously if they did that to us it would kill us because I need that money to pay the house payment, electric, and other utilities bills. Do you all think that we should change who we bank with at least till we get through the bankruptcy process?

[biotechsolution]

if you file on the credit card they will take the money from your checking account. You need to open a new checking account with another bank.
the more troubling question will be the car loans. The credit may hold on to the titles even after the cars are paid off until you repay the credit card debt.

[Keebler]

YES!!

One of the things I did for myself accidentally that I'm super grateful for is going out and setting up accounts with new credit unions.

As it worked out, I opened accounts at two new credit unions with checking accounts while my credit was still decent. If I had waited I may not have been able to do it so easily because my credit score went down.

Since then I have maintained multiple accounts but I had the time to transition to the new accounts and the old ones won't hurt me when they close.

I'm tons happier with my new choice now than I ever was with the previous credit unions. It costs almost nothing to have the new accounts and I can always close them after filing if I decide they didn't work out. For now, having the backup plans in place has really given us alot of comfort.

Of the problems you'll face is the issue of "cross colateralization" where you need to make good on ALL loans with the credit union to be able to keep your vehicles. In my case I have a $5,000 vehicle I'd like to keep but I'm only allowed to do so by keeping almost $11,000 worth of debt. Hell no...

[auttienkassiemo]

Yikes, so I will most likely have to keep the $5000 dollar credit card too, huh just to keep the cars? Crap Ol'a....

[Keebler]

Yikes, so I will most likely have to keep the $5000 dollar credit card too, huh just to keep the cars? Crap Ol'a....

You should count on it and be extremely suprised if it turns out any other way.

[beachymama]

Just making sure I am reading this right...

If you have a car loan, credit card or line of credit loan with a credit union or bank and you file bankruptcy and want to keep the vehicle, you have to also keep the other loans too?

I have a car loan for $19K, a Visa for $12K and an unsecured LOC for $17K and plan on putting the unsecured in the bankruptcy and reaffirming the car (keeping the car). I also have checking and savings, but do not keep money in them, just the minimum right now. This will be the first month that I do NOT pay my Visa nor the LOC.

This cannot be done? Thanks!

[PoorGrammyinBK7]

My husband and I have a meeting with two attorneys next week and we will most likely ask this question, but I thought I'd post the question on the board and see what all your opinions were on it...

We have a credit card that has a balance of $5000 dollars on it with our credit union. We also have two auto loans with our credit union as well as an overdraft account with a balance of $150 dollars. Right now we are current on all of those balances (not so much all the other credit cards, etc.). I'm afraid that if we get behind on this balance or that they find out we are filing for bankruptcy they are going to want to take the money out of our checking account because we also bank with them. Our checks are set up as direct deposit for biweekly fridays. Obviously if they did that to us it would kill us because I need that money to pay the house payment, electric, and other utilities bills. Do you all think that we should change who we bank with at least till we get through the bankruptcy process?

YES - ABSOLUTELY! Take the checking account down to $5 or whatever the minimum is and get your checks deposited (or deposit them yourself) to another bank - where you do NOT owe any money -- before you file BK. That was our lawyer's advice and we had almost an identical situation to yours with a credit union. There have been some members of this forum who did not do that and lost money big time!!!

[PoorGrammyinBK7]

[QUOTE=beachymama;195978]Just making sure I am reading this right...

If you have a car loan, credit card or line of credit loan with a credit union or bank and you file bankruptcy and want to keep the vehicle, you have to also keep the other loans too?
QUOTE]

This is usually true of credit unions for sure - possibly some banks too.

[Cali]

Beachy - that is true of CU's, I have yet to hear it happen with a bank.

I've always had 2 accounts, CU and bank, so I was covered when I filed.