CU won't close my account...advice?

[OnTheRocks]

I am discharged mid February and have $26.00 in a CU. I sent them a letter (not certified) requesting they close the account and remit the funds to me and they have ignored it. (I owed them 7K)

I realize I should have sent it certified and will send a second one next week. Apart from stating the intention in the above paragraph, is there anything any one thinks I should include so I can get these SOB's out of my life as rapidly as possible?


Many thanks

[justbroke]

They may have a right of setoff. IN any event, I'd send the discharge order and injunction with a cover letter indicating that they are violating the permanent discharge injunction. It may or may not motivate them.

[OnTheRocks]

Thanks JB, I will do that.

[justbroke]

Send it Certified Mail Return Receipt Requested, of course.

[walkthaplank]

They'll keep the $26 no doubt, cross collateralization and all that. As long as no other funds are going into the account let them keep the account in whatever status they choose, it should make no difference to you.

[justbroke]

They'll keep the $26 no doubt, cross collateralization and all that.

The CU technically can't without a motion for relief from the automatic stay (MFRS). Since the other debt was discharged, the CU can't "now" set-off the discharged debt against what is left in the account. The CU should have filed the MRFS before the discharge! Only utility companies get to use the right-of-setoff without a motion.

It will be interesting to read what happens with this.

[BKDefender]

OnTheRocks - they're not violating a discharge injunction by failing to close an account as long as they don't ever ask the debtor to make any payments on it. They have a right of setoff, as does any deposit institution, not just credit unions.

When you deposit money into a bank or CU, you become a creditor of theirs. If you owe them money, they're a creditor of yours. The right of setoff allows the entity owed the most money to reduce the debt you owe them by the amount they owe you. So they'll keep the $26 and apply it o the $7k and eventually close the account.

--William

[BKDefender]

justbroke - incorrect. A MFRS is not necessary with a bank or CU for cash deposits when they have a right to setoff 'lien' on the cash deposits that pre-existed the filing of bankruptcy.

NOW - if the money was deposited into the account AFTER the person filed BK then it would be a discharge violation not to return the money. The rules state that they have a right to setoff on the deposits that are in the account at the time of filing.

--William

[OnTheRocks]

I'm not concerned with the $26, my concern is that the account get closed. It is my previous employer and I had games going on with them and they are the ones pushed me into BK. I don't want them keeping it open, then making up some fee that would give me a black mark when opening a future bank account. Might not be a valid or reasonable fear, but I want it closed so I have no ties to them anymore.

Thank you for your input, I appreciate it BKD.

[BKDefender]

OnTheRocks -
JustBroke had a great suggestion - send them a copy of the discharge with an assertive letter. If you inform them that your personal liability for any contract, including a deposit agreement, with the CU is discharged - thus you are not liable for any future fees on that account. Tell them that if they contact you trying to collect on any debt then you'll forward their communication to your attorney for possible bankruptcy discharge violations.

--William

[OnTheRocks]

I will attach of copy of the Discharge Order. The letter I have drafted is;

"This is the second request to close my account at your Credit Union. Please close the account and remit the funds to the above address immediately. You may be violating the Permanent Discharge Injunction by not complying with this request.

Attached is a copy of the Chapter 7 Discharge Order. Any personal liability for any contracts, including deposit agreements, is discharged - thus I will not be liable for any future fees on that account.

Your confirmation of account closure is expected at once."


Any edits or suggestions appreciated. It's kind of fun to screw with them now LOL

[BKDefender]

As long as you say 'you MAY be' then you should be fine. Was the $26 in the account before filing BK or was it deposited in there after filing? The setoff right only applies to funds in the account as of the time of filing BK, but they cannot setoff pre-filing debt with post-filing deposits.

--William

[OnTheRocks]

It was in there pre-filing. The $26 I could care less about, but closing the account is important to me. Closure is priceless LOL. I am surprised they aren't wanting to be rid of me really.

Thank You BKD

[justbroke]

justbroke - incorrect. A MFRS is not necessary with a bank or CU for cash deposits when they have a right to setoff 'lien' on the cash deposits that pre-existed the filing of bankruptcy.

Thanks BKDefender. That probably explains somethings for me. I had, at least in my District, that the Banks motion for stay relief before they touch the money. What they do in the interim, is freeze the account... as the poster is experiencing.