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Scared of bank levy

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    Scared of bank levy

    If one of the credit cards I plan on defaulting on is of the same bank as my checking account, should I close the checking account asap? My fear is that the bank will seize the funds in my checking account, and then I'll have no money to pay the RENT!

    #2
    Absolutely. It is always wise to never keep your money in the same location in which you have a debt when filing for bankruptcy.
    Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
    I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

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      #3
      They can not take any money from your account without first going to court and getting a judgment against you. Then they have to get an order for garnishment. However, to be on the safe side, and under the advice of my attorney, I kept nothing but ten dollars in my checking and ten in my savings. I bought money orders from walmart to pay all of the bills that had to be sent by mail (and be sure to keep the stub) and paid in cash the ones I could pay in person.
      My kids better not put my FICO score on my headstone~ (quote by dspii)

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        #4
        oh... and I would talk to the bank and tell them your situation and ask if they will cash your checks (don't deposit them). This is what I did. Also, once you have filed, all garnishments will stop. If anyone takes money from you, your attorney can get that money back. Just FYI
        My kids better not put my FICO score on my headstone~ (quote by dspii)

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          #5
          It probably wouldn't be a bad idea to leave $5 in that account and open a new account at a bank that you do no other business with.

          I learned this lesson from the gurus here. A mere 16 days after missing the first ever payment with Navy Federal, they took the $5.43 in our checking account balance and applied it to the credit card debt yesterday. No phone call - nothing. Then they gave us .01 in interest today. LOL I closed the checking account via their eMessage system this morning telling them they could keep the .01. We have to leave $5 in savings because it is a Credit Union because we still have a "product" with them (aka credit card).

          Ahhhh, I love the smell of cross-collateralization in the morning! Thanks to this forum, it feels like victory to me!!
          ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
          Not an attorney - just an opinionated woman.

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            #6
            Originally posted by dneil View Post
            They can not take any money from your account without first going to court and getting a judgment against you. Then they have to get an order for garnishment.
            They do not always have to get a judgment, as others have said, there is the (strong) possibility of the accounts being cross-collateralized.
            Chapter 7 filed December 11, 2009, 341 Meeting held on January 7, 2010
            Deadline to File a Complaint: March 8, 2010

            Discharged and Closed March 11, 2010

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              #7
              Originally posted by dneil View Post
              They can not take any money from your account without first going to court and getting a judgment against you. Then they have to get an order for garnishment.
              If you haven't filed bankruptcy yet and you become late paying your loans, there is something called "right to set off" which allows them to take your deposits in order to off-set money you owe them. They can do this with no warning and without going to court.
              Filed Chapter 7 July 2010
              Attended 341 September 2010
              Discharged November 2010 Closed November 2010

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