Banking and Credit Card Accounts

[Ann]

I have a question concerning banking and credit card accounts. First, I do all of my banking with Bank Of America. I also have a line of credit that is 3 months delinquent and a credit card account that I have now decided not to pay on any more (need to make sure I pay my mortgage and cars) so my question is can they go into my bank account and take money and pay themselves? I know this may sound silly but can that happen? Also, my son has his very own credit card for college. It has a very low balance ( $400.00) and I make the payments for him while in college. Right now I make his payments from my BOA account but should I change the online bill pay to his bank account (where my husband and I are also on the account?) I don't want my son to be penalized when we file. So many things to consider when I do this. Thank you for your advice.

[catleg]

You should assume that B of A will most definitely offset the deposit account against any debts you owe by taking money from it whenever it suits them. It's time to open an account with another bank, preferably out of state on the internet. Close the B of A account. Use the new account only for paying creditors who you intend to keep paying (house, car). Once anyone you owe money to gets the account number, you can assume it's compromised.

[Ann]

Wow... is that legal? I can see this is going to be a long road! Thanks for your input!

[HHM]

Actually, they can't. Once you file BK, they can take no action to collect a debt. The problem sometimes arises when a person can no longer afford to make payments on the credit account, but cannot file BK for a couple of months.

However, once you have filed BK, they cannot touch the money in your checking account to offset the discharged debt.

[StartingOver08]

As HHM points out....the most difficult period is that time when you stop making payments and have not filed yet.

That is the time you need to be very, very careful and protect yourself. Look at Treehuggers posts and BB2U. The longer the period between the last payment and the file date, the more proactive you need to be in your planning. It is best to set up all of your new accounts at a neutral lender before you stop payments. Close your old accounts. Prepare for the worst by assuming that BOA will offset your loans with your deposits (they are actually known to do this if you have not filed).

[gregorino]

BOA sucks funds out of checking 10 months into Ch.13

I'm in a Chapter 13 pro se and had an unsecured line of credit with BOA which was included in the repayment plan with a balance @480.00. BOA filed no objection, and presumably, has been receiving payment from the Trustee all along. Thursday they took $620 out of my account and claim they have a right to offset. How can that be? They're being repaid according to federal bankruptcy law, so how can they just grab a bunch of cash as well? I've made it this far without an attorney, and don't plan on getting one now. Maybe I can file a motion with the court of some sort. Any thoughts on that would be appreciated.

[catleg]

Correct, in order to treat the funds in your account as collateral for the loan, they would still need to get an order to lift the automatic stay to collect on the account. You probably will need to figure out how to file a motion for a "show cause" order against them. I can't explain it any better than that. Maybe someone else here has more experience with motion practice in BK court.

Suggest you try posting this in ch13 forum.

[gregorino]

Thanks CatLeg!

Gratzi! Will post in Ch13 as well.