Patelco Credit Union Disowned me after filing

[wisedecision]

Just wanted to give a little info regarding my relationship with Patelco Credit Union after filing for Chapter 7.

I had a Checking & savings account, 1 visa with a $6500 balance and a car loan with a $30k balance. I was current with all obligations (car loan and Visa) for another month past the filing date. I took out all cash out of both checking and savings and left a $7.50 checking and $1 savings balance.

Within a week after filing for Ch.7 I received a letter stating they were freezing all accounts and to cut up all debit cards and remove any direct deposits. They also completely removed my online banking access. Fortunately in the process of filing I logged on to their site and downloaded the last 6 months of statements for each of my 4 accounts.

Needless to say, I am very happy that I took the advice of this board and went all cash prior to filing and left a VERY small balance in my bank accounts. Less than $10 total between Patelco and BofA.

Just thought others with Patelco C.U. accounts will find this info helpful while they are making arrangements to file.

[screentest]

Just wanted to give a little info regarding my relationship with Patelco Credit Union after filing for Chapter 7.

I had a Checking & savings account, 1 visa with a $6500 balance and a car loan with a $30k balance. I was current with all obligations (car loan and Visa) for another month past the filing date. I took out all cash out of both checking and savings and left a $7.50 checking and $1 savings balance.

Within a week after filing for Ch.7 I received a letter stating they were freezing all accounts and to cut up all debit cards and remove any direct deposits. They also completely removed my online banking access. Fortunately in the process of filing I logged on to their site and downloaded the last 6 months of statements for each of my 4 accounts.

Needless to say, I am very happy that I took the advice of this board and went all cash prior to filing and left a VERY small balance in my bank accounts. Less than $10 total between Patelco and BofA.

Just thought others with Patelco C.U. accounts will find this info helpful while they are making arrangements to file.

Thanks for posting this info. I was also wondering about this with my credit union. I have two auto loans and a personal loan with them and my entire banking history.

Would it be wise to open a new account somewhere else(after cleaning it out) just before filing or just after filing? I have everything on auto deposit auto deduction. I want to reaffirm both cars however the personal loan will be gone in BK. They will be very unhappy.

[wisedecision]

Would it be wise to open a new account somewhere else(after cleaning it out) just before filing or just after filing? I have everything on auto deposit auto deduction. I want to reaffirm both cars however the personal loan will be gone in BK. They will be very unhappy.

That's exactly what I did. I chose to open a Bank of the West Checking and Savings account online a week before filing. I recommend going directly to a branch to open a new account though. I had to wait 4 days before a branch could see my accounts where I could then make the initial required deposits in cash of $150 into each because I opened them online (minor inconvenience).

I let my lawyer know i had opened the accounts and all was good. After I filed I have had no problems with the new accounts and had my new debit card and checks within 10 days. I still run primarily off cash and only keep $200-400 in the accounts to cover check writing (Utilities & Ins.)

Just do your homework before you open a new bank account and choose a bank with no fees for their checking accounts. IMO it is probably better to open the account before filing so it doesn't raise any flags.

[ApresMoi]

Maybe I am missing something here, but aren't you defaulting on loans with them? The car loan and the Visa card balance?

[IcedLatte]

If you take all cash out of your checking & savings before filling, don't the trustees make you include them on your filing as assets? Is it legal to do that right before filing?

I am confused.

[wisedecision]

Maybe I am missing something here, but aren't you defaulting on loans with them? The car loan and the Visa card balance?

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If you take all cash out of your checking & savings before filling, don't the trustees make you include them on your filing as assets? Is it legal to do that right before filing?

I am confused.

Let me answer and help clarify.

Correct, I am defaulting on the Visa and Car loan. The information I wanted to provide to the forum is that Patelco froze all 4 accounts within a week of filing. For example, if I were to have $150.00 in my checking and $50 in my savings at the time of filing, I would have lost the ability to access that money for legitimate expenses. There's a lot of other posts with similar examples of Wells Fargo and Chase doing the same thing.

I opened the Bank of the West checking and savings account to make sure i had the ability to access money through check writing or debit purchases for legitimate expenses. I did not want to take a chance with keeping balances at any bank that was also a creditor included in the Bankruptcy.

I notified my lawyer of the new bank account I opened and the balance in the account as well as my cash on hand at the time of filing. I wanted to make absolutely sure that all info on the filing was true at the time of filing.

As for the balances of all bank accounts including the new one I opened and the cash i had on hand. I had enough exemptions to cover it all being I am a no asset case in CA.

What I learned from both this board and my attorney is that it is alright to withdrawal and go cash only prior to filing as long as the amount is not enormous.

For example, I had roughly $2500 in all my bank accounts 2 weeks prior to filing. Right off the bat $1799 of that was for the attorney and filing fees to proceed with the bankruptcy. I withdrew all $2500 leaving $10 across the accounts that were also creditors. I deposited $300 in my new non-creditor bank account to meet their balance / new account requirements and had roughly $400 in cash left over for expenses. My lawyer told me to spend as much of the $400 as possible prior to filing on expenses so my total cash on hand including ALL accounts was under $500. Since I am also unemployed, we filed the day before I got my new unemployment check to ensure that check was clear and not considered cash on hand.

Now, If you were to withdrawal $10,000 2 weeks or even a month before filing, red flags would be flying and I'm pretty sure you'd have explaining to do to the Trustee.

I hope this all made sense and if any one can validate what I wrote for others, I'd appreciate it. Thanks again to a great forum to learn and help others.

[JackBondLove]

Now, If you were to withdrawal $10,000 2 weeks or even a month before filing, red flags would be flying and I'm pretty sure you'd have explaining to do to the Trustee.

I withdrew about $14K in cash over a 4-1/2 month period, spending $12K on various things other than food and general entertainment; I have receipts for everything. For the 341 meeting, I will have a spreadsheet detailing all of these expenses. If the trustee would ask for the receipts, I will make a copy of the receipts (currently already copied onto about 60 regular 8-1.2" x 11" pages!) and send them to him.

[meateater]

The really important thing is to shift any direct deposits to a new bank to which you owe no money. otherwise, you might not be able to access a paycheck deposited after you file (way easier to make these changes with human resources pre-filing rather than stressing afterwards that they are going to find out). I waited until a paycheck cleared the new account to be certain all was running well.

[mtbc]

What I learned from both this board and my attorney is that it is alright to withdrawal and go cash only prior to filing as long as the amount is not enormous.

Surely this can be okay even with enormous sums (though they may ask where it went)? So long as you didn't buy unnecessary things with it or give it away to others or whatever. If you withdraw a large sum and just put it in a different bank or declare it on line 1 of Schedule B as cash in hand or whatever, I really don't see why the trustee would mind. The problem comes when you withdraw a large sum and at appears to vanish or it becomes much harder for the trustee to turn into cash or whatever. Why would they care how you move your cash around, so long as you still declare it all and don't make it any harder to fork over if need be?

Of course, if you spend it as cash, they'll want to see receipts for things that were clearly necessary expenses.

(I actually withdrew a bunch and declared it like that, because I wasn't sure that the bank wouldn't freeze my funds for the duration of the case.)