Debts subject to Setoff?

[LifeNLemons]

I have a bank account and my mortgage and car payment are with the same bank (Wells Fargo). If I file BK on monday, can they debit my checking account? I know that they can "setoff" from my account(s) to help satisfy my defaulted debts. I have another account with another bank, but I don't know how fast my payroll dept. will be able to switch accounts for direct deposit or issue me a paper check. I assume it will take 15 - 30 days to process my request.

I'm asking because I got a call today and the bank is threatening to take my car if I don't make a payment within the hour. So I'm filing BK on Monday and will be taking just about every dime out of my account to pay the filing fees, but my paycheck will be deposited Friday.

[Boscoe]

I would strongly recommend that you stop your direct deposit from work, hold your check until you file, then open a new account with a different bank as soon as possible after you file. Set up the direct deposit with the new bank. Surely you must have a Bank of America or several other possible banks to do business with out there......But try to not deposit anything else just in case they attempt to garnish your money due to the bk.

They should not do this and probably are prevented from doing so in a bk, but why take chances?

[JollyGG]

Now, keep in mind, my experiences are only my personal experiences and you may have different results.

However, before filing bankruptcy I had several accounts with Wells Fargo and I still do. I had two personal loans, a credit card, three savings accounts (self and two kids), two checking accounts, my mortgage and my car loan through Wells Fargo. I discharged the credit card and both personal loans in my chapter 7 bankruptcy. I had no problems with any of my other accounts and I continue to use the savings and checking accounts. My mortgage saw no effect. The car was transfered to their bankruptcy department. I reafirmed and paid the car off.

[qwertysue]

We had Wells do a set off...the amount was $599 (the highest amount they could take without it being considered a preferential payment). After that transaction we switched banks asap.

[LifeNLemons]

We had Wells do a set off...the amount was $599 (the highest amount they could take without it being considered a preferential payment). After that transaction we switched banks asap.

Did they do this prior to filing or after filing?


My problem is that I really LIKE Wells. I've banked with most of the banks around here and this has been the most pleasurable experience.

[qwertysue]

They did the setoff in March...we retained an attorney in January and filed in July...however by March we hadn't made several payments.

We had the setoff take place mid-week and later in the week was direct deposit...we skedaddled to the bank as soon as it opened to take quite a bit of the balance out. At that point we did mostly cash and carry (keeping receipts) until we filed--then we felt comfortable using direct deposit again in a new bank.

It wasn't until I did some reading on this forum that I realized the significance of 599--it seemed like an odd amount. When we filed, there was a line on one of the forms for any set off charges made against any of our accounts--we listed it on that line.

[CindyLou]

They should be able to do anything once you file due to the automatice stay. BUT I did have Wells Fargo freeze my accounts once when they saw that I had filed BK and had a chexsystems account from another bank on my report. They froze the funds with the intent to refund all the money to me and close the account. I striaghtened it out with the branch manager and he kept the account opened but I didn't have access to the money for a few days. The manager said it shouldn't have happened. My account was in good standing and I didn't have any credit accounts with them that were included.

Ironically, 18 months later Wells Fargo just approved our FHA Home Loan...so I guess they aren't so bad after all