JP Morgan Chase buying WAMU: Offset question

[Stonecutter]

I wouldn't make that assumption until you speak with your attorney. State chartered banks must follow state laws and regulations while National Banks do not. With a state chartered bank your deposits are protected under the bankruptcy. With National Banks, the research I've done says that only Social Security deposits, funds from VA benefits, Railroad retirement pensions and similar "Federal" benefits cannot be used for the Right to Offset. A bankruptcy may not protect you against a Right to Offset seizure by a National Bank, so I'd try to confirm this with your attorney before assuming that any funds you have with WAMU are untouchable.

[Lajazz947]

I stumbled across this forum while researching the "right to offset" regulations, as Chase had raided my WAMU account just this morning.
I had a personal business account with Chase which was closed in 2008 due to excessive overdraft fees. I started my personal WAMU account earlier this year before the Chase merger, but had an uneasy feeling when it was announced.
Anyway, I had a $1500 retirement annuity direct deposited yesterday and this morning Chase emptied my entire account to offset what I owed them from the closed account which had already been sent to collections.

My angst centers around the issue that in Illinois, retirement annuities are exempt from collections, judgments, bankruptcies, etc. Since the 'offset' collection was done for a closed account which Chase had already assigned to an outside collection agency, I feel I should have been protected under the Illinois statute. The bottom line is that the OCC has refused to enact policies would require National Banks to comply with state banking and consumer protection regulations, so they can pretty much do what they want.

One thing I would like to point out is that a National Bank cannot use the 'right of offset' to collect on a credit card or revolving credit loan. So anyone worried about that can rest easy. However if you have money in a WAMU account and owe money to Chase for any other type of debt..... withdraw it now!!! They hit me just this morning and the branch manager told me that Chase is going through the WAMU accounts to see which ones still owe them from former Chase accounts. So if they haven't hit you yet, it's going to happen soon. And once they do there won't be much you can do about it.

Wow, I feel your pain. When it happened to me it messed me up quite a bit.

I am assuming that now that I am discharged I am safe with a WAMU account since I included CHASE in my BK.

Just the same I am now going to work on getting off Chexsystems in order to find a completely unaffiliated bank.

[Stonecutter]

I stumbled across this forum while researching the "right to offset" regulations, as Chase had raided my WAMU account just this morning.
I had a personal business account with Chase which was closed in 2008 due to excessive overdraft fees. I started my personal WAMU account earlier this year before the Chase merger, but had an uneasy feeling when it was announced.
Anyway, I had a $1500 retirement annuity direct deposited yesterday and this morning Chase emptied my entire account to offset what I owed them from the closed account which had already been sent to collections.

My angst centers around the issue that in Illinois, retirement annuities are exempt from collections, judgments, bankruptcies, etc. Since the 'offset' collection was done for a closed account which Chase had already assigned to an outside collection agency, I feel I should have been protected under the Illinois statute. The bottom line is that the OCC has refused to enact policies would require National Banks to comply with state banking and consumer protection regulations, so they can pretty much do what they want.

One thing I would like to point out is that a National Bank cannot use the 'right of offset' to collect on a credit card or revolving credit loan. So anyone worried about that can rest easy. However if you have money in a WAMU account and owe money to Chase for any other type of debt..... withdraw it now!!! They hit me just this morning and the branch manager told me that Chase is going through the WAMU accounts to see which ones still owe them from former Chase accounts. So if they haven't hit you yet, it's going to happen soon. And once they do there won't be much you can do about it.

[ALICIA21]

I got burned by Wells Fargo when they took $3500 out of my account and offset it against a credit card bill.

I now use WAMU. If JP Morgan Chase buys WAMU is my WAMU account subject to an offset by Chase?

It may not matter since I will be filing first week of October and I doubt that a deal can close that fast but then again who knows.

Advice?

great tips. I enjoyed reading this

[No Gravy]

Thanks 'no gravy' for the informative article!

You're welcome

It was nice to see that even people who aren't a step away from bankruptcy weren't happy about banking with Chase. It was like validation for me, that I'm not over-reacting.

I was never thrilled with certain aspects of WaMu...for instance their bill pay/online banking is retarded to the max...but I'd grown used to their warts. Now I have to start over with yet another bank...and hope *they* don't get bought out, too.

[PoorGrammyinBK7]

Lajazz,

Not sure any of us really know the answer to this and so many other questions regarding the current financial mess - I would just say this: if I were you, I wouldn't take the chance - especially in light of what happened to you already.

[adaughter]

think about an attorney trust

so we were also worried about getting our bank accounts taken by the creditors without knowing....so our attorney offered us an attorney trust client account where he would hold the funds for us and it would be safe there. also the attorney is not allowed to take any funds etc. he just holds it for us I think thats a pretty safe bet where everyone can sleep at night knowing their funds are in a safe place dont you guys think? have any of you guys heard of this?

oh also one additional question-do you guys think it would be safer for money to be kept in a community credit union or a attorney trust account?

[liz417]

The information in this article may be helpful. The Consumerist had several articles on the WaMu buy-out on Thursday and Friday. It looks like at minimum things will be OK for 3-6 months, with no real substantial changes for a year.

It may very well depend on how the economy fairs over the next year, also. I know that doesn't directly answer your question, but that article has good general info.

Thanks 'no gravy' for the informative article!

[No Gravy]

I asked the same question in another WAMU thread....we included Chase in our Chapter 13 filing in 2002; we obtained a WAMU Visa in January 2007 after our discharge in August 2006. Never any late or nonpayments, small balance, either paid in full or way more than minimum payment sent monthly when used (use for car repairs and household repairs). Limit increased twice since initial acceptance at $3,500. Would anyone with any credit card and buyout knowledge know if our cards will survive or be cancelled out after this buyout?

The information in this article may be helpful. The Consumerist had several articles on the WaMu buy-out on Thursday and Friday. It looks like at minimum things will be OK for 3-6 months, with no real substantial changes for a year.

It may very well depend on how the economy fairs over the next year, also. I know that doesn't directly answer your question, but that article has good general info.

[Flamingo]

I have two credit cards with Wamu, a Visa with a limit of $2500, and a Mastercard with the same limit. Balances right now, on both, hover around $1100 on each.
Back in 2004 when I filed bankruptcy I included two Chase cards and burned Chase to the tune of about $15,000.
What are the chances of Chase cancelling my Wamu cards once their computer systems are merged?

I asked the same question in another WAMU thread....we included Chase in our Chapter 13 filing in 2002; we obtained a WAMU Visa in January 2007 after our discharge in August 2006. Never any late or nonpayments, small balance, either paid in full or way more than minimum payment sent monthly when used (use for car repairs and household repairs). Limit increased twice since initial acceptance at $3,500. Would anyone with any credit card and buyout knowledge know if our cards will survive or be cancelled out after this buyout?

[magyar123]

I have two credit cards with Wamu, a Visa with a limit of $2500, and a Mastercard with the same limit. Balances right now, on both, hover around $1100 on each.
Back in 2004 when I filed bankruptcy I included two Chase cards and burned Chase to the tune of about $15,000.
What are the chances of Chase cancelling my Wamu cards once their computer systems are merged?

[No Gravy]

Oh, good question. I owe Chase appox $24k and I have direct deposit with Wamu. I will be unable to file until Nov (trying to save $$ to pay attorney last payment). Anyway, I hope someone can answer this for us.....

Same situation here, too. I'm wondering if November is going to be too long to wait, or if I should switch banks now.

Maaaaan, what a PITA.

[Banko]

Right of offset

Its called right of offset or right to offset when they pull money (seize deposited funds) from your account to pay delinquent loans. Most all banks have this somewhere in their fine print. There are some limitations. Each state may have different laws referencing it. Some require notices to be sent others may not.

[Reddrocket07]

Thanks for the help Liz. Its been a while since I posted last. Ive been busy with work, then the internet was out for a week from that wind storm!

[liz417]

Can a creditor withdrawl from your checking account if they are not affiliated with the bank? Im worried Chase will try to withdrawl from my National City Account

Hi RedR,
As far as I know, No. They have to be within the same company. For example: I am filing bk on 2 BofA credit cards and *if* I banked with BofA, they may attempt to "cross collaterize" and withdraw $$ from my bank account to pay ccs. Hope this helps.