Direct deposit and lines of credit

[wonkettegirl]

I had hoped to file today or on Monday, but I learned that my November paycheck will still be direct deposited into my checking account Nov. 1. This is bad news because the same bank the holds my checking account holds a line of credit that I intend to discharge through bankruptcy. My atty told me to empty, as much as I could, all of the $$ from my checking account because as soon as I file for bk, the bank can somehow "seize" the $$ in my checking account to pay off the line of credit.

So now, I am guessing (and would like to know your thoughts) that I will have to wait to file until after the Nov. 1 check is deposited and I have a chance to "empty" (I will get much-delayed and much-needed repairs on my car with the $4) the account again. True?

[WoodSprite]

Good question...yes, indeed. And unless you want to wait to file until all checks you write against that balance have cleared, be sure to either withdraw the money in cash money orders. The trustee will look at your balance on the day of filing and checks written but not cleared will not matter. I had to do the exact same thing (as did many of us here), and it was nerve-wracking, since we were cutting it awfully close.

If you haven't done so already, since you're filing on an account at the same bank, you should open an account elsewhere before you file, too. Be sure the new account isn't an institution affiliated with any of your lines of credit.

[magyar123]

Close that bank account ASAP - and get your employer to issue you a paper check for the November 1 payroll. Just explain to your employer that you are closing your current bank account.

[wonkettegirl]

Magyar, apparently it's already a "done deal." In order to stop the autopay process, I would have had to get the paperwork in before the 15th or so. I had no idea!

[epiphany]

Magyar, apparently it's already a "done deal." In order to stop the autopay process, I would have had to get the paperwork in before the 15th or so. I had no idea!

Does your company have an HR department? If so they should have something in place to do an emergency stop on direct deposit. Call the payroll center (not your boss) and ask them. Can't hurt.

ep

[Never_Again]

I would agree with Epiphany as well... Think about something... if you close the account, any payments that you sent are returned, as are all of the deposits. YOU just have to find the deposit, whereas they have no problem finding you for returned payments.

Someone should be able to help you in finding the money if it is returned to the depositor.