Secured vs. Unsecured debt?

[TomD]

I have a checking account that has an overdraft line of credit attached. My current balance on this is $1500. When I went 60 days with no payment, they hit my primary checking for the minimum balance due. I'm assuming that this makes it a secured account. Do you concur?
Thanks,
Tom D.

[SinkingFast]

It's called Cross Collateralization. (or something like that)

Probably somewhere in the fine print of your Checking acct info or the Overdraft priviledge is a statement allowing the Overdraft to automatically be covered in the event of non-payment by your Checking acct.

Hope that makes sense.

Same thing happens to people with Checking and/or Savings accts and Credit Cards on the same bank. If you stop paying your CC, the bank has the right to draw funds from the Checking and/or Savings acct.

[LostOne0069]

This same thing happened to me a couple of weeks ago... I called the credit union a couple of months ago to try and make arrangments for payments that I could afford on my Visa credit card that I have through them (current minimum payments are about $400/month on a $9k balance). They said, "no" pay your payments as they are or else. Well, I kept making monthly payments of about $150 to them as that was all I could afford and that was what most of my other creditors had accepted (virtually everone EXCEPT American expresss... who is acting just like this CU)

Fast forward two months... obviously I was behind and the minimum due was about $900... they just transfered it out of my checking account one day after my paycheck had direct deposited... no notification to me nothing. Thus I nearly ended up bouncing my rent check.

I had been trying to get arrangements with my creditors so that I could keep paying payments as long as possible... pay back as much as possible ... now I have no choice. If they do that again I WILL bounce rent/utility etc. etc. checks. I am praying that the rent and utilities checks I just sent out for the 1st of the month clear before the CU gets a chance to nail it.

I would change my checking account over... but I have a line of credit also with that bank and the auto payments come out of the checking account every month. Also, my car payment and boat payment (both of which are current) come out of that account every month automatically... now, on top of that, the other 6 or so credit card companies that DID work with me and lower my payments... those payments auto debit from that same checking account.

So If I move accounts... I end up with bounced checks all over the place since all those automatic payments are "electronic checks".

Now, obviously I can move the payments... but that takes time... not to mention the time it takes for the direct deposit (the only way my company does it) to switch.

I'm meeting with a new attorney this Thursday... hopefully he'll be better than the last one and we'll be able to file soon and get everything going.

Ironically, the $900 payment that the CU took.. plus the last couple of $150 payemtns will probably get pulled back by the trustee and distributed to all my other creditors.