Filing a BK Ch.#13 - Primary Banking is NFCU

[sylviag1973]

My Attorney's office is telling me that Navy Federal CU will close my savings and checking accounts, and I can't blame any financial institution doing this since I failed to comply with the terms and made them loose money, but I'm filing a Chapter 13 and most comments on here are for Ch.7's

I want to know if anyone has a recent experience with NFCU recently as I will barely be filing in the next week or so.

I'm concerned about the home loan -- will this be affected? I know I'll never qualify for anything else since the credit cards carry a balance of around 45k

Sadly the COVID situation came to ruin a lot of things for me.

Thanks so much for your help.

[flashoflight]

I don't have much NFCU specific information, but I don't think ruining your relationship with NFCU is something to worry about. They are a big call center lender and bank with lackluster pricing and service on some of their products. That's like me posting I'm upset that Chase or Amex won't like me anymore and I'm blacklisted there forever. Navy is just another mediocre financial institution. After I cleaned up my Chexsystems report with proof of bankruptcy filing, I went to Fidelity brokerage as my one stop shop and love it.

We have some pretty experienced chapter 13 folks here. I'm in the central district of California so I'm familiar with the chapter 13 scene here. If you describe your situation with more detail, we can help more. So far it's just NFCU.

[shipo]

Another Chapter 13 alumnus here, I'm pretty sure justbroke will be checking in soon as well.

As flashoflight correctly pointed out, don't lose any sleep over your NFCU relationship, there are other lenders out there (I for one use PenFed).

So, ask any questions which are on your mind.

[justbroke]

You will be banned from credit products from NFCU forever (unless you pay them back every penny). They will close your checking accounts if they are linked to the NAVCHEK (now called Checking Line of Credit - CLOC). Other than that, your share account should remain intact.

However, if you have credit products at this bank then I would move my checking account to a different bank before filing (or any account receiving a direct deposit and/or benefits). That's just to make sure.

I'm fine with them. I still have a Flagship VISA with a very considerable credit limit. But I do know that they will not give any further credit, ever, if there was a loss to the CU.

I'm concerned about the home loan -- will this be affected? I know I'll never qualify for anything else since the credit cards carry a balance of around 45k

If you're going to keep the mortgage, then you put in your Chapter 13 a plan to keep the home. You do this by proposing to pay the current interest rate and to pay any arrears over the life of the Chapter 13 plan. I do not think NFCU can cross-collateralize the home with the credit cards, but you and your attorney should look at your mortgage/note.

Move your savings, checking, and automatic deposits if you have them going to NFCU. This will make your life a little easier, just in case.

[sylviag1973]

Hi All,

You guys are truly amazing. I can't thank you enough for all the feedback and help offered. Here's a little more of my personal situation.

As I said, I have NFCU as my main banking institution but also have a savings account with PenFed - I tried opening a checking with them, but due to all my delinquent accounts etc.. they denied me Oh well right.. I can't do anything about that.

I also have a checking account that is with Southland Credit Union that when it was small it was linked to the City employment I have, they had free accounts for all the City workers.. not sure if they'll close that one, but they didn't back when I had the Ch.7 after my divorce - as there is no credit there to worry about.

I opened up a online Chime checking account a while back to separate some expenses and keep track of stuff, I think I'll have to be using this one because I don't think any other bank will want to grant me a checking account - I tried with Wells Fargo and they denied me this week.

I do plan to keep my home and mortgage through NFCU simply because there is no way someone else will finance me at this point with my credit so I don't think refinancing is even possible -- unless you guys know of other options.. My interest rate isn't too bad so I think I'll be okay.

My HELOC is also up to date -- I don't know what happens with that.. I guess I just keep paying it.. since this is backed by my home.

I am mainly concerned with the mortgage being affected, but if you guys say that if I put it in my bk that I'm continuing with the debt and will continue to pay it I should be fine - I guess I'll just rest on that. I do have 6 months of forbearance I took and NFCU was going to open up a subordinate note to just have that loan paid at the end of the loan or when I sell my home, but my Attorney suggested I put those arrears in the Ch.13 plan since that will be paid being that it is a secured account.

Other than here goes my scary list of creditors that will get burned; Citibank (best buy), Wells Fargo (visa), NFCU Cash Rwrds Visa & Plat Visa, NFCU Amex, Capital One Venture & Savor, Calif Coast CU Mastercard, and Discover

Other store cards are; Lowes, Walmart, JCP, Target, and PayPal...

I also surrendered my auto back in June of 2020 -- I couldn't pay a $760/mo and got a used vehicle that gets me where I need to go and lowered my payment to $330/mo --

So this is about all my scary story for now.. Again, thanks so much for all your help and input.. I do have to add that the emotional exhaustion is what is truly getting to me..

[sylviag1973]

Oh wait! I did forget to mention one things... back in 2018 I had a small home based business which NFCU opened up a business checking for.. I ended up closing that LLC and business so I no longer really use the account but I never closed it.. I am sure this has nothing to do with anything, but I will end up closing that too since that LLC is closed and I'm no longer running that business.

[shipo]

sylviag1973, thanks for the update...

Here are two suggestions of next steps I learned from my Chapter 13:

1. Shop, shop, and shop again for a good attorney; I cannot stress this enough, a good attorney for a Chapter 13 filing is worth their weight in gold.
2. Your attorney will probably recommend you ditch the old car and buy something new(er).
   1. Once again, I cannot stress this enough, my attorney strongly recommended I follow this course of action and I opted to try and make do with my old, and as yet totally reliable Honda Accord (like you I went for an old ride in the vain hope of avoiding bankruptcy; didn't work); unfortunately during the fourth year of my Chapter 13, the Honda succumbed to all manner of corrosion, this in turn made me dip into my meager savings and buy something new(er) for cash, and even that wasn't enough, I ended up eating beans and weanies for a month or more to survive.
   2. Had I opted to say, buy a new 2015 Toyota Corolla to get to and from work, the full amount of the car would have been paid for during the Chapter 13 as part of the plan and I would have come out of my bankruptcy with a saleable asset worth a heck of a lot more than the car I ended up purchasing.

[sylviag1973]

shipo

Thank you! Thank you! Thank you!!

I hope I did the proper shopping around.. I was burned by another Attorney office while shopping.. I was almost all paid up and then realized they weren't doing what was best for me or didn't seem to know what they were doing and I fired them, but lost $1500 in the process. I then went to 2 other offices and the one I got seems to be one of the top ones as far as what I've experienced, and what I have seen with reviews etc.. The staff is very attentive etc..

With regards to the car matter.. regretfully I'm not sure I can do anything now.. Let me explain what happened.. the 1st Attorney's office was the one that told me to let go of the expensive car and buy a cheaper one.. when I fired them and hired the one I have now, they said it wasn't a good time to file because I had barely did the change in car and that wouldn't look good in the eyes of the Judge.. so I waited.

I've been juggling the Forbearance and the filing because I can't file unless my forbearance is off and I couldn't file before because I was waiting on the months to go by with the car getting a little older.. The car I have isn't too old but its not new and now I'm scared with what you're saying its a 2019 Hyundai and I'm not sure if it will last the 5 yrs. .but there is no way I can purchase a car now -- to get this car I had to get a cosigner :/ otherwise I wouldn't of qualified myself because of how my credit is.. so not sure how getting a new car would even be possible --

[sylviag1973]

I also need help with another question I have.. My children and my Mother have accounts with NFCU where I'm the joint owner (2nd place).. I manage my elderly Mom's bills and for my kids I opened their accounts when they were younger so I had to be the joint owner..

Do I need to take myself out of these accounts? someone mentioned (not sure where) that this might affect their accounts.. Is this true?

[flashoflight]

Hi All,
As I said, I have NFCU as my main banking institution but also have a savings account with PenFed - I tried opening a checking with them, but due to all my delinquent accounts etc.. they denied me Oh well right.. I can't do anything about that.
I also have a checking account that is with Southland Credit Union that when it was small it was linked to the City employment I have, they had free accounts for all the City workers.. not sure if they'll close that one, but they didn't back when I had the Ch.7 after my divorce - as there is no credit there to worry about.
I opened up a online Chime checking account a while back to separate some expenses and keep track of stuff, I think I'll have to be using this one because I don't think any other bank will want to grant me a checking account - I tried with Wells Fargo and they denied me this week.

Order an updated Chex report about two weeks before filing. You will need to dispute every bad thing in there with your bankruptcy case number. Once your Chex is clean, you'll have an easier time opening new accounts.

I do plan to keep my home and mortgage through NFCU simply because there is no way someone else will finance me at this point with my credit so I don't think refinancing is even possible -- unless you guys know of other options.. My interest rate isn't too bad so I think I'll be okay.
My HELOC is also up to date -- I don't know what happens with that.. I guess I just keep paying it.. since this is backed by my home.
I am mainly concerned with the mortgage being affected, but if you guys say that if I put it in my bk that I'm continuing with the debt and will continue to pay it I should be fine - I guess I'll just rest on that. I do have 6 months of forbearance I took and NFCU was going to open up a subordinate note to just have that loan paid at the end of the loan or when I sell my home, but my Attorney suggested I put those arrears in the Ch.13 plan since that will be paid being that it is a secured account.

In the central district of California, you pay the post-petition mortgage payments directly to the lender and pay the mortgage arrears through the trustee. You cannot miss any of the post-petition mortgage payments under any circumstances just like you can't miss the trustee payments.

After 12 months of on-time trustee payments, you can get an FHA refi loan. Your house needs to be in decent condition to pass appraisal. FHA comes with upfront MIP and PMI which will make the real interest rate about 3.4% on a 30 year and 2.7% on a 15 year. You would refinance out of the FHA 7 years after you file with a conventional.

The HELOC is variable rate and it will crush your chapter 13 if rates go north of 5% or if you re-enter the interest+principal repayment period during the chapter 13. You will not be able to draw on the HELOC anymore. Depending on the HELOC balance and the rates on both mortgages, you may want to refi out of everything into a FHA after one year of ontime payments to avoid a payment spike during the 13.

I also surrendered my auto back in June of 2020 -- I couldn't pay a $760/mo and got a used vehicle that gets me where I need to go and lowered my payment to $330/mo --

You need a reliable vehicle that will survive the chapter 13. Something like a recent model Toyota Corolla. Even better if it has the original warranty or an extended warranty run by the manufacturer (eg. Ford, Honda, etc.). Chapter 13 doesn't deal with 1-time events very well such as your car crapping out in an expensive way. Chapter 13 can sometimes deal with long term issues such as a salary cut. If you are close to a 0% plan, there is almost no room for adjusting your plan payments downwards without paying off the secured arrearages.

With regards to the joint NFCU accounts, make sure you print out the balance on the date of filing and exempt whatever is in there. You'll want to time the BK filing on a date when all of your non-retirement financial accounts have a low balance in the aggregate. I don't like the idea of joint accounts post-petition unless married, but ask your lawyer about that. You should do some basic asset protection like don't expose the kid's and mom's accounts to your creditors with joint tenancy. California used to have zero exemption for cash so filing used to require emptying accounts the day before. Now there is a small exemption for cash that may help avoid trips to the ATM or last minute groceries.

[flashoflight]

Why can't you come off of forbearance now? You need to make all post-petition mortgage payments without any trouble unless you are giving up the house. You will need to submit proof of mortgage payments periodically to the court until you are confirmed.

The lawyer's idea of paying mortgage arrears in the 13 makes sense because it will be at the expense of unsecured creditors due to the shorter 5-year repayment instead of the 40-year or whatever forbearance came up with.

[sylviag1973]

flashoflight

Thanks again for all your feedback and help.

Its is 2 weeks before my BK filing so I just pulled my Chex report. Here's the information on it;

Inquiries Viewed by Others there's like 5 pulls/views from Ally Bank for some reason in 2020.

All these sections stated "No Information Found" ; Reported Information, Inquiries Viewed Only by You, Retail Information, and History of Checks Ordered.

Social Sec Number Validation shows the year and state of when my SS# issued.


RE: Joint Accounts

There is a voluntary removal of joint owner form I think I'm going to fill out because I rather not risk anything.. I think its just safest.


RE: Mortgage & HELOC

I was told that if I get a Judge by the name of Johnson (who according to many is very strict) he will make me put my mortgage payments in the plan.. This is why I'm filing at the end of the month, so I don't have to make 2 mortgage payments (information provided by Attorney's staff).

The Heloc was changed from the variable account where there was access to cash to a no access set rate loan.. Its at 6% and as far as I'm concerned it won't go up on the life of the loan.. I also don't have the ability to access any cash anymore.

You mention I can refi my FHA mortgage after 12 months of on-time payments.. won't this give me a higher interest rate since I'm in the middle of a BK? I currently have a 3.875 Interest Rate.

OHHH!! one very crucial part.. my home is owned by my son and I.. is this going to affect my son? there is nothing I could do to have him removed :/


RE: Autos

When you mention that Ch.13's aren't friendly with one time auto issues or job loss etc.. what does this mean? if my car tanks.. I won't be able to get another car? I was told the car payments will be made outside the plan :/

You mention something about a job loss.. (let's pray that this doesn't happen) what does this mean?

I believe I was told I'd be paying back 16% of my debt.. so I'm almost positive I'm not on a 0% payback plan.. but not completely sure.

[flashoflight]

Chapter 13 is rough in the Riverside district. There's more than one judge you need to pray you don't get. Talk to your lawyer about the other judge. There are good BK lawyers who will refuse chapter 13s in Riverside. In case you get Johnson, you need to read his long standing order for debtors and debtors' counsel.

I don't want to advise anything on how to title your property and accounts especially on the eve of BK. I wouldn't change anything unless advised by an estate planning attorney and your BK attorney to do so. There are major ramifications that occurs with how you title your house and prop 13/19. But in short, I wouldn't have titled a house with you and your son. I have no idea how someone would fix this problem. You have multiple judges that are by the book and don't want to risk a bad faith filing by changing title on the eve. You cannot take actions that hinder and delay your creditors when they are after you. Talk to your lawyer before you do anything.

[sylviag1973]

flashoflight

Thank you.

[justbroke]

I have nothing to add to what flashoflight wrote, especially since flash is a California resident.