What to do when you owe money to a bank and have your checking account there?

[sbush]

I have a checking account with Chase and owe them about $10,000 in credit cards. I have always been current. Next week they will become due and I'm skipping them. Should I move my checking account now? I just got paid and I only get paid once a month, so I'm wondering if I should have my husband (or myself) open a checking account at a new bank.

I have no idea if my account has the clause where they can empty my account to pay the debt. And, really, I don't want to call and ask. In my head I think it's best to move the account, but I'm not sure...

[Faust]

I wouldn't take a chance, I would move it. JMO.

[sbush]

That's what I'm thinking.

[justbroke]

You move your demand deposit accounts, certificate of deposits, and anything else that they have a "right of setoff" against!!! I learned the hard way. Many others have learned the hard way. Don't let it happen to you.

[JEM]

Yes, change your direct deposit (if you have it) and open a new account elsewhere. Better safe than sorry.

Maybe a local CU?

[may]

I'm kinda in the same situation. We're members at a CU and we have a Line of Credit with them and a CC. They take money out of DH's paycheck every payday for the line of credit and if I don't pay the CC on time, they take money out of our checking. Last month they took money that was supposed to pay our mortgage.

I'm thinking about switching too. I just don't like that they'll take money when they want. I understand I owe them, but it's not fair when you have bigger/more important debts to pay.

[cc8225]

Be careful with the CU. Most have a cross collateral clause. I learned the hard way i have a car loan with a CU (225 a month) and a signature loan with them (345 a month). Even if I pay the car off they will hold my lien hostage until the sig loan is paid in full. I had to buy a new car before my credit tanked and my lawyer advised me to surrender the old car to credit union once we file to free us from the sig loan. Once I do that the sig loan will turn into an unsecure debt that will be treated like a CC in a 13.

Good luck.

[BrokenBrklyn]

I was literally keeping all my money under my mattress until I filed..

[MSbklawyer]

Should I move my checking account now?

Yes. Yes. Yes. Yes. Yes.

I have no idea if my account has the clause where they can empty my account to pay the debt. And, really, I don't want to call and ask.

You don't have to call and ask. They don't need a 'clause'. It's the common law doctrine of 'setoff' . . . or "offset" as they say in damnyankee territory. Move the money.

[sisterfunkhaus]

Move it.

[sbush]

Ok, we'll be getting a new account this week. Also, is it ok to just cash my paychecks and not really use a bank? I thought they wanted you to show activity. How would you then prove how much you spend on gas or food?

[justbroke]

Ok, we'll be getting a new account this week. Also, is it ok to just cash my paychecks and not really use a bank? I thought they wanted you to show activity. How would you then prove how much you spend on gas or food?

If you are over-the-median you don't have to prove it, as your budget is pre-set by the IRS allowances. Many people still purchase gasoline with cash, so, I don't see issues.

[jdcat]

My plan for the coming months before we file our under the median ch7 is to only leave what money is needed to pay our mortgage, utilities, and auto loans in our bank account. The rest is coming out so I can pay for food, gas and such in cash. I can keep a closer eye on our budget that way. Should I be saving receipts then? Do I need to keep meticulous records of what we buy with cash?

[marie]

I have my main checking account with Chase. Also my mortgage ( current ) and 2 credit cards ( past due ) I don't keep money in there, but I do move money through there, to pay bills. So far so good.

I did open a new account with regions bank, as I have no prior involvement with them, But now I see that they are FIA...and I do have a FIA card that is past due.

Is that likely to be a problem ?