Credit Unions and freezing accounts

[Wantmypeace]

Hi! I'm preparing to file in the beginning of February, so I'm getting all of my ducks in a row. I have a question about how credit unions work, and I've read a lot of conflicting ideas about this issue. I'm hoping someone can help clarify it for me!

I have a car loan, 2 visas, and a line of credit (overdraft) at Educational Employees Credit Union. I also have a checking and savings account there. I've left only 10.00 in my checking account and 5.00 in my savings account at this institution.

I opened a checking and savings account at Golden1 Credit Union. My husband's paycheck is automatically deposited into this new account. We have no other accounts with this institution.

My question: I assume Educational Employees Credit Union will freeze our checking and savings when we file. Will Golden1 freeze our accounts? (Because if they will, I need to stop the automatic deposit of our paycheck, or we won't be able to survive during the bk process...)

Any help on this is appreciated! Thanks!

[AngelinaCatHub]

Credit Unions are (supposed to be) not for profit privately owned establishments. To protect the shareholders they will indeed lock you down on everything. Unless you reaffirm all your loans you will be locked out so to speak. They are not banks but can run like one. The five bucks in your savings is your one, single share as a share holder. That makes you a member and you cannot remove it and be a member. So you are correct, remove at the payroll end your direct deposit. Don't tip the CU off in any way. Best wishes to you. 'Hub

[Wantmypeace]

'Hub,

I totally get that the credit union I have the loans with will lock everything down. My question is whether the OTHER credit union, the one I just opened an account with and started direct depositing my husband's paycheck into, will lock everything down. We have NO LOANS with them. Instead of opening a new account at a regular bank, I just went to a DIFFERENT credit union. Was that a mistake?

[tobee43]

i have heard that usually........that is USUALLY it's only the credit union that has a cross collateral situation freezing some accounts...yet...today i believe there is a thread about someone having their bank account frozen and they haven't even filed yet???

i can only tell you what we did....we closed ALL major cross collateral accounts...opened two new accounts one a credit union account where we had auto deposit for pension and another small community bank for our ss check....either was frozen during our bk process. why? i haven't a clue other than we didn't have anything attached to the accounts, no car loan, no credit cards etc.

i think you did the right thing by just leaving small amounts in the accounts...hopefully that will work..but some credit unions as well as banks sometimes just don't seem to care! i also think you'll be fine...

[ccsjoe]

Want,

Credit Unions have their own statutes which may vary from CU to CU. There is no way anyone here can tell you how Golden 1 will react unless they've had the exact same direct experience with them. I would check their account opening agreement (deposit agreement or membership agreement) and see if they consider BK to be a breach of membership statutes.

[msm859]

We have an account with Golden One. Checking, savings and a signature loan. They have not frozen or tried to touch anything. We continue to make the payments on the loan. We did get a letter from them thanking us for continuing to make the payments and acknowledging the tough time we must be going through.......they then "politely" asked us to reaffirm the loan and advise us that their policy is that anyone who causes them a loss for any reason cannot remain a member and it is important to have good relationships with financial institutions. It is a small loan and we had intended to pay it off anyways. Incidentally I also have accounts with Bank of America and US Bank and owed them money and neither touched my accounts.

[Wantmypeace]

msm, THAT is what I was hoping to hear! I have no loans with them, so I just want to be sure that my direct deposit paycheck is accessible after we file. We need to pay our bills, of course! I just didn't know if the credit unions maybe had some sort of "understanding" between each other that they "have each other's backs," if you know what I mean! LOL!

My lawyer said to make sure I don't have more than about 3,000 in the account the day we file. I think it will be more like 300!

[Clabbergirl]

I wish I had read this thread before! I discovered that my credit union is going to debit my account $410 effective midnight tonight because my ex hasn't been paying a credit card from the same bank (joint card from the marriage). I closed the joint checking and opened up a single account at the same credit union not realizing how dumb that was. I asked a customer service rep about this very thing on the phone at one point, and was told they wouldn't pull the money out, but reminded me I was responsible for it in the even of a default. I didn't realize it would be forced responsibility.

I cleaned out the money I had in there immediately and have spent most of my lunch breaks this week trying to cancel my paycheck deposit, child support deposit, and anything else I can think of. Unfortunately there's an outstanding check that will bounce, and I'll have to make good on that. I have an account at US Bank also, and part of my paycheck goes there so I changed the allocation for all of it to stay there. I have a credit card with US Bank that I am continuing to pay because I'm scared they will also lock up my money if I fall behind.

My credit score is 524, house is in foreclosure, 60-90 days late on every unsecured debt, and some history of 60-90 days on auto but it's current right now. What are my chances of getting another checking account at a bank I've never done business with? Do they scour a person's credit report before opening one?

[Wantmypeace]

I don't know about getting a new account. I think they only check the Chex System to see if you've bounced a bunch of checks or opened multiple accounts lately, but I'm not sure. Others with more experience will (hopefully) chime in!

I wouldn't trust that your money at US Bank is safe if you have a loan with them even if it's current. I've heard others say that some banks will freeze your account even if you're current on a loan with them. I think that's why the advice is to open an account somewhere where you have no loans/credit cards/lines of credit.

Good luck!

[Clabbergirl]

I opened a new checking and savings account at First TN Bank over the weekend. I've already got part of my direct deposit forms and am ready to make changes to my paycheck and child support deposits. I've learned my lesson on this - and no matter what happens after this BK - no more loans at the bank I do business at! I'll be moving all money out of my US Bank acct very shortly. Great forum here!