confused about credit unions

[justbecause]

We have always banked with credit unions. As I am reading the forum I have seen it mentioned that credit unions will close your account when you file. We have no loans or credit cards at the credit union just savings and checking account. Will these accounts be okay or do we need to look at opening an account at a bank.

[AngelinaCat]

You need to talk to your CU personnel beforehand.

A credit union is not like a bank, although many people think they are. A credit union is a community of members who willingly contribute their money for the good of all. That money is invested on behalf of everyone, and everyone who is a members is a contributor by allowing their money to be invested.

When the CU gets the notice, 'Suggestion of Bankruptcy', you will get a form letter, informing you that because of your bad financial management, you have let the entire membership down, and that your account(s) have been closed, and you have a certain amount of time to move your funds. All aspects will be closed, including automatic deposit, auto-bill pay, and online access.

If you wish to remain with them, you need to talk with them. If it doesn't matter, then you can move your accounts now. Just be aware that a bank can close accounts too, upon notice of bankruptcy.

'Hub had been with his CU since 1964, and had a good relationship with them, and wished to remain with them. After he had spent a couple of hours on the phone with their BK department, the limits on our account were lifted, and returned checks were honored, and NSF fees that accrued while our account was closed, were reversed.

ETA: I see that you are in Ohio. Our CU is Universal 1 Credit Union, formerly known as NCR Universal 1, of Dayton, OH.

Welcome to the forum!

[lillymarlene]

When I filed chapter 13 October 2010, I had two accounts with one credit union, personal and business. The personal one had about $5.00 in it, and they closed the account. The business one, is still open with about $10, but inactive. I no longer dare to use this credit union, since when I filed my BK I owed $2,000 on a personal credit line.

However, summer of 2010 at the urging of a friend, I opened a new business account with another credit union where I don't owe any money. I'm still using that account, which has online access, and an attached debit card. Debit cards, and online access, were immediately shut off at the "old" credit union, probably as soon as they received their copy of my petition.

justbecause, I think you should probably be allright, since you don't owe the credit union you're using any money.

[df04527]

If there are no loans and only a checking and a savings account... I think the accounts will not get closed?

[justbecause]

Thank you I am glad I caught that in my reading, this forum is so helpful. I need to have an account for direct deposit that is the only option for my employeer. I will talk with our credit union before filing.

[df04527]

A word of caution if you mention it to them they could/might close, even though you owe them nothing. I wouldn't spook them. Credit Unions are awesome but they view risk quite differently. We didn't tell our credit union, also owed them nothing, and our accounts survived just fine. Just an fyi

[lillymarlene]

If you wish to remain with them, you need to talk with them. If it doesn't matter, then you can move your accounts now. Just be aware that a bank can close accounts too, upon notice of bankruptcy.

Guess I was just lucky. The bank where I had my mortgage (never late) and a personal checking account didn't close my account, but other things happened. First the mortage was sold to another servicer. Then I found I could no longer use my attached debit card, to make purchases over the phone or online. I can use this debit card in stores, where I enter my PIN. Then later though it's not really much, I dropped my online access, since they began charging $5.00 per month. The bank claims none of this stuff has anything to do with my bankruptcy, but I wonder!

[my2girls]

Our credit union froze our accounts when I called up to discuss the fact we "may" file Bk. I had to go into the bank and an ordeal to withdraw our money out of our checking account. Obviously, I stopped using them and they eventually closed our account. We now bank with another local credit union with no problems.

[AngelinaCat]

Guess I was just lucky. The bank where I had my mortgage (never late) and a personal checking account didn't close my account, but other things happened. First the mortage was sold to another servicer. Then I found I could no longer use my attached debit card, to make purchases over the phone or online. I can use this debit card in stores, where I enter my PIN. Then later though it's not really much, I dropped my online access, since they began charging $5.00 per month. The bank claims none of this stuff has anything to do with my bankruptcy, but I wonder!

About a month or so ago, we got a message from our CU stating that 'due to security concerns', we needed to start using the PIN number for our debit cards. I had a fit, because I also order things online, particularly from Amazon. However, 'Hub settled me down and read the entire message to me. All we had to do was go in a store and use the debit side of the card ONCE and put in the PIN number. This 'reset' everything in the CU's system, and we could proceed as before. There haven't been any problems...

[delphinus317]

My CU did not close any of my accounts when I filed. I have an auto loan with the same CU that I reaffirmed in my BK, they just froze the automatic payments to my loan from my checking account until I signed the reaffirmation agreement. I made one manual payment that was due before my 341 & then automatic payments were reinstated. Other than that, there was no interruption on my accounts there.

[frogger]

I will talk with our credit union before filing.

Provided that you do not owe your credit union any money, your best option is to not say anything to them. They won't be listed on the your petition, they won't be listed on the matrix/index, so they won't receive notice.

Don't rock the boat or you just might tip it over........

[Nursemikki]

I use a credit union and my Ch 13 was confirmed July 6th, so far my credit union hasn't given me any notice that anything is amiss.

[goon]

At the time that I filed I had accounts with 3 different credit unions (total of 4 savings accounts and 3 checking). The only ones that had issues were with a CU which had 2 different claims (car loan, second mortgage). The accounts at the other two CUs had no issue ( I am about halfway through my plan now ).

That being said one word of caution for the future, cross collateralization can be a big issue with CU's. As an example while preparing for my BK I had stopped making payments on my second mortgage (we were giving back the house anyway). The CU decided to refuse to accept our car payment until we were current on the second and said anything paid towards car payment would go to the second first till it was caught up. Basically told us to get our second caught up or they were going to fast track repo-ing our car as quickly as they could (even thou the car was upside down) and apparently because of the cross collateralization clause in the agreements they could do this....

[moonbeam9209]

We just had our 341 meeting on the the 23rd, and we haven't heard anything from our Credit Union. We have our modified(one year ago) hamp mortgage with them, and are upside down on our house. We probably won't reaffirm our mortgage, unless they require it or want to reduce our principal. We owe 195 and it is worth about 135K. We also had an auto loan with them which was paid off two years ago, and at that time they told us that they weren't sending us the title to our car, because we owed them 8k on a credit card we defaulted on. We definitely aren't gonna pay 8k on a car this is worth only 2k.

Sorry to ramble, but my point being, they haven't frozen our accounts (yet). We have a checking with direct deposit of my husbands paycheck, also, we pay our mortgage online with them. I just paid our mortgage (a few days before the 341) and it went through fine.

They do the cross collateralization, but now I am wondering when our bk is discharged, will they have to give us the car title since the credit card debt will be no longer valid?