Can I keep my debit card?

[whitekr]

"The law is 70 days on Cash Advances and Convenience Checks use. $750 for "luxury goods and services". But someone reported recently that they were pegged for an $11K cash advance 110 days prior to filing BK. They are in the process of negotiating that with the Creditor right now."


But is a balance transfer the same as new charges or cash advances? it is not adding anything to the debt. I was considering it anyway with this particular card, as the zero interest just ran out (in case we decide against BK).

I am hesitant to change accounts for a couple of reasons. Once, I just opened it a couple of months ago. But mostly becasue the bank manager is a client of mine. I changed to his bank when her bacem my client. He would really want to know whay I was no longer banking with him. AND he know just about all of my other clients-he's a big networker.

[lrprn]

Why would I not use direct deposit? I'm filing in a month or so and my employer is offering (for the first time) the option to use direct deposit. They have been mailing my checks to me since my company is out-of-state.

The thought is that if your checking/savings account is in a bank/credit union that also owns one of your unsecured debts (credit card, overdraft protection, etc), if your check direct-deposits, the bank could remove the unsecured amount owed from your account before you could stop the deposit. Better to control the deposit yourself until you are sure that the bank/credit union won't take the money from your account to pay your unsecured debt.

The safest thing to do in this situation is open another checking account at a different bank/credit union and have your paycheck auto-deposited there. Don't want to wake up one morning and find the bank cleaned out your account and you now have no money to live on until your next paycheck.

[kcj]

I stopped my direct deposit for a couple months before we filed. I wanted to keep my account as low as possible.

I also went to a new bank (because I had a CC with the one I was at) and started the paperwork for a new account. I did it online, got a debit card approved, and just needed to go to the branch to sign things. I did that the day after we filed.

[SinkingFast]

Why would I not use direct deposit? I'm filing in a month or so and my employer is offering (for the first time) the option to use direct deposit. They have been mailing my checks to me since my company is out-of-state.

As Lrprn and KCJ said, having checks gives you better control over your money. Also, if you have a CC or over draft protection that you're including, then the bank could freeze your checking, lift the Stay, and sieze those funds.

But, in our case, it had to do with timing. When Hubby was being paid by Direct Deposit, that deposit was actually made after the close of business, in the evening, THE DAY BEFORE payday. Where people who receive paychecks get those in the office the next day on payday. We filed on the 14th and payday was on the 15th. If Hubby had still been Direct Deposit, his pay could have been part of the BK Estate. Whereas, getting a paycheck in the office on the 15th, that paycheck was not a part of the BK Estate.

[sisterfunkhaus]

I wouldn't close the accts. Just let them dwindle down to the minimum required to keep the accts open. One of the questions asked in the BK Petition is to disclose any bank accts you've closed during the year previous to filing BK. Closing bank accts can send up red flags with the Trustee.

What kind of red flags? I don't understand why closing one account and opening another would be an issue. I am new at all of this. I closed my account with Chase b/c my account was with Bank One and Chase bought them out. I found their customer service to be rude. They made a couple of mistakes with our account, They changed a lot of the rules and peeved me off, so we closed the account and opened one at BOA. We closed the account b/c they charged us a fee after we stopped direct deposit. There was nothing in the account to cover the fee, so we got charged $32.00 in addition to the freakin' fee. We didn't want to have to pay a fee for an account we weren't using and we didn's want to take a chance on an overdraw happening again, so we closed it. Now I'm scared that it will look bad I'm curious as to why doing that is an issue if you have all of your bank statements from the old bank and can prove that nothing fishy went on.

[SinkingFast]

What kind of red flags? I don't understand why closing one account and opening another would be an issue. I am new at all of this. I closed my account with Chase b/c my account was with Bank One and Chase bought them out. I found their customer service to be rude. They made a couple of mistakes with our account, They changed a lot of the rules and peeved me off, so we closed the account and opened one at BOA. We closed the account b/c they charged us a fee after we stopped direct deposit. There was nothing in the account to cover the fee, so we got charged $32.00 in addition to the freakin' fee. We didn't want to have to pay a fee for an account we weren't using and we didn's want to take a chance on an overdraw happening again, so we closed it. Now I'm scared that it will look bad I'm curious as to why doing that is an issue if you have all of your bank statements from the old bank and can prove that nothing fishy went on.

In your situation, you have a reasonable explanation for changing banks. Rude customer service, changes in service that resulted in increased fees, etc. (I think I'd leave out the part about BK'ing on debt to Chase and Chase owning the bank now.) And, you have a paper trail showing why you did what you did.

We closed an acct nearly a year ago. When we moved, we left the old acct open a couple of months to allow checks to clear and the dust to settle. That bank doesn't have any branches where we moved to. Reasonable explanation.

But there are people who go around closing accts in prep for filing BK. Specifically to hide cash assets. That's why it sends up red flags with Trustees.

People have done all kinds of things we don't think to do in prep for filing BK. Honest filers get caught in the cross hairs because of what a few bad apples have done in the past.

Rather than wave that red flag in front of the Trustee, just leave the acct open with as little as possible to maintain the acct. It's a CYA to keep people from having to explain things. The less you have to explain, the better.

[CATCHMEIFYOUCAN]

Balance Transfers

But is a balance transfer the same as new charges or cash advances? it is not adding anything to the debt. I was considering it anyway with this particular card, as the zero interest just ran out (in case we decide against BK).

The balance transfer I did on my credit card was considered a cash advance, even though it went off to another credit card, they stated in the transfer. Well FINE, I declared it on my BK as a payment to my other creditor. Fair is fair, so it looked like i paid one of my creditors 10g's - and the trustee never brought any of it up. As a matter of fact, the trustee never brought any of my recent transactions up, since I filed end of July, and my "recent cash advance," were in May. But never say never.

Catchmeifyoucan

[anonymuse]

But is a balance transfer the same as new charges or cash advances? it is not adding anything to the debt. I was considering it anyway with this particular card, as the zero interest just ran out (in case we decide against BK).

The balance transfer I did on my credit card was considered a cash advance, even though it went off to another credit card, they stated in the transfer. Well FINE, I declared it on my BK as a payment to my other creditor. Fair is fair, so it looked like i paid one of my creditors 10g's - and the trustee never brought any of it up. As a matter of fact, the trustee never brought any of my recent transactions up, since I filed end of July, and my "recent cash advance," were in May. But never say never.

Catchmeifyoucan

We try to advise people on the safest methods to draw the least amount of attention to draw scrutiny by the trustee.

[SinkingFast]

We try to advise people on the safest methods to draw the least amount of attention to draw scrutiny by the trustee.

Yep! Yep!!

CMIYC's Trustee may be Lax and the Trustee another filer draws may go thru everything with a fine toothed comb.

Maybe CMIYC's Trustee didn't look because it's a Ch 13 case where another Trustee would go after the money on a Ch 7 filer.

Different Courts, different local rules. Different Trustees in the same Court, different methods. There's no predicting what will happen so it's best to err on the side of caution.

[davids]

bank accounts.

It's called Cross Collateralization and it could be in the fine print of any one of your banking agreements with Chase.

If you default against one acct, the bank can draw from another acct.

It doesn't happen to everyone, as JFA just said happened in their case, but it has happened to others that have posted here.

I wouldn't close the accts. Just let them dwindle down to the minimum required to keep the accts open. One of the questions asked in the BK Petition is to disclose any bank accts you've closed during the year previous to filing BK. Closing bank accts can send up red flags with the Trustee.

Open new accts with a different bank. Switch from direct deposit to getting paychecks if you can as well. Stop using checks and switch to Debit Card, Money Orders, and Cashiers checks. Gives you better control over your money the closer you get to BK filing time. Money is instantly gone. You don't have to wait on checks to clear.

what a load of BS... my company no longer will issuse paper checks, its automated direct deposit only. how can they just dip into your account and take whatever? I have mortg payments, car payments, misc life expences.
if they come and take whatever out of my bank, are they going to make my morg and car payments and put food on my table?

[SinkingFast]

what a load of BS... my company no longer will issuse paper checks, its automated direct deposit only. how can they just dip into your account and take whatever? I have mortg payments, car payments, misc life expences.
if they come and take whatever out of my bank, are they going to make my morg and car payments and put food on my table?

Scuze me??!!

It is not a load of BS!

If you have a CC acct with the bank your checking and/or savings acct is with,......... There may be something in the fine print of your CC agreement that would allow the bank to cover a default on the CC directly from your checking and/or savings acct.

Not my rules. Theirs. The Banks.

And NO! They won't make your car payments, or your house payment, or put food on your table. They will take THEIR money, that you agreed they could by signing the contract, from your acct to pay your debt to them.

[anonymuse]

This may be a silly question....but can I keep my debit cards after BK?

Assuming you don't have any other outstanding debt there, I would guess that you would keep your debit card, but your overdraft protection (if it was a line of credit) might be gone.

[FilingOnMyOwn]

Your debit card has nothing to do with anything. All it is is a plastic check you use over and over. Its not credit. If you are in good standing with your bank and don't owe them anything, you can keep it. If you owe your bank money that will be included in your bankruptcy, than they may close all your accounts including the use of your debit card associated to your checking account.