Will my credit union kick me out?

[Michellemg]

Hi. I belong to a schools credit union. I love my bank. I know two people who filed bankruptcy on them and were kicked out of the credit union. Can they kick me out f I reaffirm my debt to them? The friends I have didn't reaffirm the debt so I'm not sure how they'll deal with this.

[tyson24]

I belong to a transit credit union and they are not kicking me out. The manager even told me it was good that we were getting a fresh start. We used to be the people that could walk in and get a $5000 sig loan no problem. The problem is, if you owe them money on a loan or card, it is cross-collateralization and most will terminate your accounts. I do not owe this CU for anything so maybe that is why they will not have a problem.

If you have money in that account, get it out before you file. Go to a bank you are not affiliated with financially.



Not an attorney, not advice, just experience!

[ccsjoe]

Hi Michelle,

Credit Unions are their own separate entities and none operate in any apparent unison. It is not possible to predict whether a credit union will terminate someone's membership or not dur to filing bk. However, given the precendents you stated above, it sounds likely that your membership will not survive.

In my own case I belong(ed) to 2 credit unions. One I had no current loans with and I've already received a letter from them stating that my membership has been rescinded and my $25 membership share account deposit is being returned to me in the mail. The other, which I bk'd a maxed out cc on has yet to say anything other than being close to my filing an AP on them for repeated violation of stay ocurrences.

It would be in your best interest to establish a banking relationship with an entity where you have no credit facilities with just in case.

[stormy]

My credit union's position was that since they weren't losing any money (I had a joint loan with the Ex; he refinanced it in his name only) that I could stay with no problems. They told me the situation would be different if I had a loan with them and didn't reaffirm it; then I would have been kicked out because they "could" lose money if I walked away.

[Freddy03]

Hi Michelle,

Credit Unions are their own separate entities and none operate in any apparent unison. It is not possible to predict whether a credit union will terminate someone's membership or not dur to filing bk. However, given the precendents you stated above, it sounds likely that your membership will not survive.

In my own case I belong(ed) to 2 credit unions. One I had no current loans with and I've already received a letter from them stating that my membership has been rescinded and my $25 membership share account deposit is being returned to me in the mail. The other, which I bk'd a maxed out cc on has yet to say anything other than being close to my filing an AP on them for repeated violation of stay ocurrences.

It would be in your best interest to establish a banking relationship with an entity where you have no credit facilities with just in case.

The one CU that rescinded your account. Was that a new account?

I recently just opened a CU (one that I have never had any business ties to pre BK) and now I'm worried.

[tcreegan]

Hi all,

Unlike a bank, when you join a credit union, you signed some sort of membership agreement. Find this and look for what can get you kicked out of the club....

Seems like what a credit union will do depends on the phase of the moon, day of the week, and the weather outlook...

I got a kick out of A.C.s comment that CUs are the ankle biters of the financial world.

Tom in Colo

[LaurieM]

If a person were to actually read every word on the operating agreement (signature card... whatever) that he/she signed when opening any bank account (whether at a bank or a credit union) he/she would fmost likey find what's called a "right of offset" clause. That means that if you owe them money and are not paying as agreed, you are giving them the right to debit your bank account w/o going through a court process, like any other creditor would have to do in order to seize funds from your bank account. I'm thinking this would be a good reason not to bank where you borrow (although in an ideal world, you'd want to develop a relationship with your bank, right?) Perhaps this is what's meant by not keeping all your eggs in one basket?

I used to be on the Board of a credit union. It was a part of our by-laws that if any member caused us to incur a loss, they could no longer be a member... that's pretty common with credit unions, I believe.

[ccsjoe]

The one CU that rescinded your account. Was that a new account?

I recently just opened a CU (one that I have never had any business ties to pre BK) and now I'm worried.

No Freddy, old one. Don't worry, you'll be ok. Stop stressing.