Collection Efforts and Bankruptcy

[ihatearizona]

My husband and I are going to be filing chapter 7 next week. We live in Arizona. We are going pro se since we are broke and cannot afford an attorney. I have a few general questions:

1. On 05/04/04 Wells Fargo Auto took almost $900.00 out of our checking account (without our permission) towards what we owed them on a car we turned back in to them. Along with taking the funds, they also placed a "hold" on our account for the same dollar amount. My question is this: Once we file with the court can I contact Wells Fargo Auto and give them notice that we have filed bankruptcy (since it's going to take the court 20-40 days per their web site) AND once that is done, how long will they have to remove the hold on my account or do they have to remove it at all? What do I do if they don't remove the hold and they are required to by the stay?

2. I believe I read somewhere that if any of your creditors received funds (voluntarily or involuntarily) 90 days prior to filing for bankruptcy that they would have to give the funds received back to the trustee? Is this true and if so, would a creditor such as the IRS be given the funds first or would it be evenly distributed amongst our creditors listed?

3. We have a judgment against us by a local attorney for one of our credit card accounts that is being included in the bankruptcy. While I know that the judgment will be void once the bankruptcy is discharged, how do I go about having the judgment removed?

If anyone has any answers to the above questions I would be very grateful!

[HRx]

You should have recieved notice to go to court prior to Wells Fargo requesting to take money from your account. (Unless the law in AZ states otherwise) but typically a debtor will have had advance notice of any sort of garnishment action against them by a creditor. Once your BK papers are recieved and stamped by a federal court, the Automatic Stay goes into effect. The best way to expedite the Automatic Stay is to, fax or overnight a copy of the first 4 pages of your BK filing to any creditor that have taken action against you.

This is when having a attorney becomes helpful, if the creditor doesn't lift the hold, your attorney would simply send them an easement letter or letter stating that you are filing BK and that they are required under federal low to cease all collection/adverse action against you. But since this is not the case, just send the creditor a copy of your stamped BK papers. They will react accordingly.

The judgement will be lifted once the court mails your stamped BK papers to all the creditors listed on your schedules.

Let me know if I need to clarify or expand on anything.

Good Luck!

[ihatearizona]

Reply to Todd

Todd:

Wells Fargo holds our checking account and the auto loan that we defaulted on. They are two separate companies but according to them they are allowed to take any actions necessary to recoup their losses. This includes a so called agreement with them when you open your checking account. Our case is a little different because we never opened an account with Wells Fargo. Our checking account was with Norwest but Norwest was purchased by Wells Fargo. I'm sure we never signed anything but I'm told that when the account transfered over that so did all of their rules.

[HRx]

Have you asked to see a copy of this agreement/policy?

Todd:

Wells Fargo holds our checking account and the auto loan that we defaulted on. They are two separate companies but according to them they are allowed to take any actions necessary to recoup their losses. This includes a so called agreement with them when you open your checking account. Our case is a little different because we never opened an account with Wells Fargo. Our checking account was with Norwest but Norwest was purchased by Wells Fargo. I'm sure we never signed anything but I'm told that when the account transfered over that so did all of their rules.

[ihatearizona]

Agreement/Policy

Todd:

No, I have not been provided with a copy of this policy but from what I've read all that they have done, including freezing my checking account is perfectly legal due to a Supreme Court ruling in 2002.

For others out there: If you have a credit card or loan through the same or linked institution as your bank account your creditors have the right to take whatever they like out of your account without any notice or a judgment. Your bank also has the right to freeze your account at any time per the Supreme Court. No wonder the check cashing places are doing such a booming business!

[HRx]

Other similiar partnership/affiliated collection methodologies exist too. For example, if you have an insurance and credit card through the same company and you happen to default on your cc they can elect to no renew your insurance policy. I'd like to see the supreme court ruling on the law that was passed. Even if it were a law, they still should have to first exercise reasonable attempt to collect and notify you of their intent of seizure. .

Todd:

No, I have not been provided with a copy of this policy but from what I've read all that they have done, including freezing my checking account is perfectly legal due to a Supreme Court ruling in 2002.

For others out there: If you have a credit card or loan through the same or linked institution as your bank account your creditors have the right to take whatever they like out of your account without any notice or a judgment. Your bank also has the right to freeze your account at any time per the Supreme Court. No wonder the check cashing places are doing such a booming business!