Cross Collateral Agreement

[ONEBADAPL]

Hello,

I'm new here and does anyone know of any banks who has cross collateral agreements? I have cc I stopped paying this month with the same bank I have an account with and have my pay direct deposit there. I'm planning on filling BK in 4 months and I want to make sure that they don't take funds out of my personal account to pay for my cc debt.

I bank with Chase & Citibank and both of them I have cc debt. Chase 30k and Citibank 20k

[justbroke]

Most credit unions cross-collateralize credit cards with things like mortgages and car loans. This gives the credit union more stability, I suppose.

As far as larger banks, and specific to what you're getting at, they generally don't cross collaterize. What they tend to do, however, is exercise a right of setoff which allows them to dip into your demand deposit and/or time deposit accounts to either make payments or pay off an accelerated loan.

You should not have your demand/timed deposit accounts at the same place you have credit accounts! Simple as that.

[WhatMoney]

In other words, find a new bank for your checking account ASAP.

Every bank has a right of setoff clause in their account disclosure agreement these days. You probably have 30-60 days before their internal collections start dipping into your direct deposit account.

[frogger]

In other words, find a new bank for your checking account ASAP.

Every bank has a right of setoff clause in their account disclosure agreement these days. You probably have 30-60 days before their internal collections start dipping into your direct deposit account.

Exactly right. It's not only the credit unions that are doing the cross collateral, a lot of the banks are doing it everywhere they can. The "big" banks may not be doing it as much, but the local/regional banks are.

[StartingOver08]

The Right of Setoff is used by all types of banks, both large and small. Actually if you put in google BOA or Wells Fargo or any of the big banks you will see lots of horror stories about right of setoff.

[justbroke]

I have my own stories about a mid-sized bank who did this to me! I hope that the original poster heeds the warning.