Credit Union and Discharged Debt

[Griff]

I filed for Chp. 13 in April 1998. Everything went fine, all payments were made (5 year plan) and the bankruptcy was discharged. I have since cleaned up my credit report making sure that all negative information had dropped off. I have established a hard earned FICO of 800+ and purchased a new home, car I paid cash for, etc.

Today my wife and son stopped by a credit union that had been listed as part of our filing almost ten years ago to open an account for the boy. They would not allow her to open the account due to a charge-off (over-draft protection) that they still had on record. They asked her to voluntarily pay the amount. Again this was listed as part of the bankruptcy, they did not file an objection and it no longer appears on any credit report that I have seen.

Has this credit union violated the law? If so, do I have recourse?

Thanks,

Griff

PS: It was hard, but after the discharge and things started dropping off the CR it was like warm Spring day. The trick is to change those things that started the problem in the first place. Not easy, but it can be done.

[rrockinggramma]

I am not sure about law violation but I do know that credit unions are not BK friendly. I filed on one in 2001 (chapter 7) and to this day cannot cash a check at any of their branches (drawn on their bank etc) Do you still have an account at that credit union? Mine refused to service me at all. If you still have an account there and bank there, then I think what they did was not right, but if you haven't banked there in 10 years, then I would think that they would have the right to refuse you service.

[chpxiii]

I believe AMEX does the same thing. If you BK on them you get black listed. I have heard (rumours only) that if you pay what you owe you'll get off the black list.

While legally your debt is discharged and you do not owe them that money, and while they cannot go after you for the debt (which would be a violation of the automatic stay of your bankruptcy), I do believe that they don't have to service you.

Almost any business can reserve (some) rights to refuse service to some people. It really all depends.

I don't think this Credit Union has violated any laws, and I don't think you have any recourse. You'll just have to take your business elsewhere.

[krielly]

I too had CU debts (personal loan & cc) when we filed 13 in 2005. I learned the really hard way about cross-collateralization. They froze my checking account which had a little over $2000 in it at the time. After some really crafty work by our attorney, we were able to list the 5K total we owed them as secured debt, rather than unsecured.
Once that was accomplished, they "unfroze" my account, and re-activated my debit card.
Don't want to get too far off topic here, but my main point is the credit union told me that it was their policy NOT to do current or future business with anyone who they suffered a loss from. There was no guarantee by paying them back at 100% that I would get a loan from them in the future, but that it WAS guaranteed that if the CU suffered any financial loss from me that they would definitely not do any future business with me.

K

[6ftladycop]

My credit union did the exact same thing to me. I learned the hard way as well. I even chatted up some of the folks here on this site. Most here told me to file anyway against them, open another account someplace else, get another debit card etc, but what they did not understand was the same thing you mentioned....no matter what anybody says here, once those credit unions get wind of the fact that you are filing against them, cash station card, Visa debit card, savings account, checking account, direct deposit for my payroll check etc....it was the worst hell ever. They knew this too which is why against the advice of the people here on this post, I went on and had them declared a secured debt as well. As soon as they got the word that I would not file against them, they gave me all my stuff back. They even asked me if I was interested in buying a car through the credit union(can you believe that)said their interest rates would be cheaper than a dealership. I got my credit card back right in time for Christmas. It was a small amount this time, but still they gave it to me. I am not sure which is worst......going through it with the credit unions or what they blackmail you into doing to get you not to file against them....lol

[chpxiii]

I'd rather file against them and possibly lose the "priviledge" of them taking my money and earning interest off of it (which is what banks and credit unions do with our money) and have my debt discharged, than be extorted to pay them. There are plenty of other businesses that will take my businesses.

[krielly]

I'd rather file against them and possibly lose the "priviledge" of them taking my money and earning interest off of it (which is what banks and credit unions do with our money) and have my debt discharged, than be extorted to pay them. There are plenty of other businesses that will take my businesses.

Trust me, I would have also rather have listed them as unsecured as well. Unfortunately, they had me by the @ss! They had over 2K tied up, half of which was for my mortgage, the other was for groceries, utilities, etc for the month. Like my attorney said, I kind of had to make a deal with the devil. Not my preference, but I had little choice.

Wish I knew about that and this forum before I filed.

Water under the bridge at this point.

K

[Minnymouth]

No they are not in violation, and no - don't pay it.....

Take your boy's account to another bank to open it.

Credit unions will not do business with BK filers if you file against them.....

You may pay the bill and they still not do business with you..... or may still not help establish credit for the boy...

[stljohn]

I am not sure about law violation but I do know that credit unions are not BK friendly.

I don't know your definition of "BK friendly" but to me it means someone who won't automatically disapprove because of a recent BK, toward that definition CUs are definitely more friendly then banks.

Banks are uniformly BK unfriendly. It takes 4,5 years post-BK before they will loan you money. I'm not talking about subprime banks like HSBC.

I've been researching local and not local CUs and while some of them won't talk until some years post-BK I also have a list of 5 that said yeah put in an application.

[253BK]

what if you have a credit union as your bank and a credit card through them BUT with 0$ balance??? Do you guys think that will be a problem? We just opened a new account that has our checks being deposited in there each month and I really dont want to have to fight with them to keep the account or get out any money!

Give me your thoughts!

[lrprn]

what if you have a credit union as your bank and a credit card through them BUT with 0$ balance??? Do you guys think that will be a problem?

The credit union can't take money from your checking to pay off a $0 balance. As long as you don't have any other services that you owe (for example, overdraft for checking that shows $ owed when you file or any other unsecured loans), then you should be fine.

Of course, always check with your lawyer to be certain this is right for your situation. He/she knows much more about all the details of your case than we do.