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Will credit union close our accounts when we file BK?

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    Will credit union close our accounts when we file BK?

    We bank with a local credit union where my husband has his pay deposited weekly and where we have a checking account and debit cards. We have no loans with them nor any credit cards. I have read on the Internet that credit unions typically close bank accounts when a member files bankruptcy. Has anyone heard something similar?

    #2
    They may freeze them. I never had this issue, but I don't bank at a credit union. It's really hard to say what your credit union will do.

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      #3
      If you are not defaulting on them, they will probably do nothing. A few banks have frozen accounts even if they are not defaulted on by the consumer. Wells fargo was bad about this in past. Not sure if they are still doing it. My Cu ( I did default on a loan with them) stopped my debit card from working, I then called them and they explained since I defaulted them, It would no longer work. They suggested I reaffirm the loan, which I did not. So I closed the account. I had opened a new bank account a few weeks b4 filing as a stand by, was glad I did .
      chpt 7 ,5-2009

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        #4
        At the time that I filed I had accounts at 3 different credit unions. The only one that did anything to our accounts in any way was the only one of the three that we had debt included in the BK. That being said different credit unions are different (from what I have been told the one that we had problems with would have been a problem anyway when filing BK). It is really hard to say if a given CU or bank will do something unless someone has specific experience (and even then it isn't always the same for everyone)

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          #5
          I used to bank with a credit union that I really liked, but unfortunately they closed my checking account right after I filed my Chapter 13. It most likely was because I had to list a loan for $2,000 that I had with them. I also had another checking account with a small local bank, that held my mortgage, but I was able to continue using that account.

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            #6
            While credit unions generally frown on Bankruptcy filings, they are usually OK so long as you don't have a dischargeable loan with them, as people above have advised.

            If they do freeze your account and you do not have them listed as a creditor, you and your attorney can usually get that unfrozen quickly.

            Now, for anyone else reading this who DOES have a debt where they bank.... move that checking account immediately! Because the moment you file, the bank will seize your funds, take pictures of themselves enjoying your money and swimming around in it like Scrooge McDuck and post the photos to Facebook while leaving your account littered with zeros. Because they can.

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              #7
              Since you will not list them as a debtor, they will not get a notice of your filing. So unless they check the public records they will not know. You could call the Cu and ask for the bankruptcy dept and ask. I talked with them several times in my case, They suggested I rebuild my credit by paying off my loan postpetition. Of course I explained, the whole purpose of my filing was getting legally out of debt.
              chpt 7 ,5-2009

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                #8
                Mine didn't. I only had checking and savings with them, no lines of credit.

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                  #9
                  My credit union froze our accounts after receiving notification of our filing ch. 7. We were current on our auto loan with them and current on a small overdraft protection line of credit with them. I called them and the lady asked what our intentions were regarding the auto loan and credit line. I told her we would be re-affirming the auto loan (which we did) and we would be paying the credit line off shortly and we would like to continue doing business with them. She unfroze our accounts right then, we re-affirmed the auto loan and shortly after our 341 we paid off the credit line (which they promptly closed, unfortunately) and we're still banking with them today
                  Chapter 7 Filed 12/7/11
                  341 Hearing 1/12/12
                  Discharged 3/23/12!

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                    #10
                    We have an auto loan through our CU, but we are keeping the car. I called and spoke personally to the staff member in charge of bankruptcy issues, and she was great. Because I communicated with her about the BK and our intentions (the day before filing, actually), we have had no problems with our account.

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                      #11
                      Originally posted by Nursemikki View Post
                      Mine didn't. I only had checking and savings with them, no lines of credit.

                      Same with me. I've had no problems at all, but I have no debt with them either.

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                        #12
                        As you can tell from the above posts, your situation with your CU is 'iffy'. 'Hub had been with our CU for about 40 years when we filed, so we had a very good history with them. We had a car loan (about 10 months remaining) and an overdraft loan account. We had to reaffirm both before we were able to resume normal business.

                        It is understandable from their point of view, in that all the members contribute to the benefit of the entire collective. When one member defaults (files BK) then every other member is injured.

                        At least that is the way that we understood the 'nastygram' we got from the headquarters before 'Hub spent a couple of hours on the telephone with them.

                        Good luck to you!
                        "To go bravely forward is to invite a miracle."

                        "Worry is the darkroom where negatives are formed."

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                          #13
                          We had a loan and credit card with our CU, and they dropped us like a bad habit. We knew it was coming, so it does seem that if you have a debt with a CU they will not allow you to bank with them anymore. We got a nice letter stating they were dropping us becuase we caused other members to have a loss since we filed BK. I see their point, and we have moved on.
                          Filed Chapter 7, No-Asset; November 10, 2012.
                          341 Meeting; December 12, 2012.
                          Discharged; February 13, 2013.

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