Jump to content

Can bank empty checking account for credit card debt?


afreespirit
 Share

Recommended Posts

Hello from the state of Washington,

I had 341 for no-asset Chapter 7 on Sept. 22, 2005. So far, so good.

About 6 months ago, I changed to a new bank, due to BK-associated problems. This bank recently completed its purchase of a credit card company with whom I have an outstanding balance, currently awaiting discharge.

Can the bank, now or post-discharge, seize the funds in my checking account for the credit card debt?

If they are forbidden by law to do this, might they just proceed anyway, leaving it up to me to figure out what I can do about it?

Of course, the smartest thing would be to close this account and find a different bank. I have not done so as yet, because my original bank had said they intended to report me to ChekSystems, for debts owed them on a line of credit and unpaid overdraft fees.

Before the reporting deadline set by bank one had passed, I opened the account at bank two. There probably isn't much chance of getting an account anywhere else now, due to ChekSystems....although, I have been a little surprised that bank two does not seem to have checked up on me since the initial transaction.

So before closing my current account, I am seeking the opinion of knowledgable members of this board.

You are all so kind and generous in sharing your time and experience with your fellow debtors. Thanks.

Link to comment
Share on other sites

Can the bank, now or post-discharge, seize the funds in my checking account for the credit card debt?

No, they cannot. Right now the automatic stay would prevent them from doing anything. Once its all over, they can do nothing to collect on a discharged debt.

Link to comment
Share on other sites

LadynRed,

Thank you. I had a reply written, but somehow accidentally deleted it. :(

The gist of it was, could you please explain about "offsets", and how an offset is different from my situation?

It will be a great relief if I can keep my bank account; I just need a little more reassurance, before I trust that the bank, who is now one with my creditor, will not make off with the pittance that ensures my survival!

I know you are knowlegeable on these matters, and am most grateful for your attention.

Again, thanks for your kind efforts.

Link to comment
Share on other sites

It also takes a while for mergers like this to be completed to the point where it affects customers directly in your kind of situation. If everything had been fully merged before you filed, its possible they could exercise their right to set-off, but you'll probably be discharged before they get their act together.

Link to comment
Share on other sites

Thank you both so much....managing daily life just became less of a problem than I had feared. Whew.

Yes, now I see the difference between a setoff for a loan, and owing on a cc the bank owns....thank you bingo.

The acquisition became complete only a few days ago, has been in progress since June. In fact, the proposed merger was announced mere weeks after I opened my account---I could have chosen any number of other banks---imagine my chagrin. :roll::lol:

So---the merger is complete legally as of about October 2. BK was filed on August 17; 341 on September 22, discharge expected within 2 months.....if this checks out ok to you, then the issue is resolved.

You guys are the greatest....may your good works carry you far on your path through the world.

Thanks, from a fellow traveler.

Link to comment
Share on other sites

Im a little confused now, Ive read the boards quite often,and I do recollect a post of the same nature where I beleive it was either lady or admin said that money could be seized if they have an interest in that bank,are you sure about your answer here lady?Do you know the post im referring to?

Link to comment
Share on other sites

Not precisely no. In most cases where you have a credit card or other debt with a bank that you have a checking/savings in, they do have the right of set-off and can take the money in the account.

However, in this case, the CC debt wasn't part of that bank when the OP filed, and the actual merging of all the accounts and such probably won't happen for months. The OP should be discharged by that time.

If they DO dip into the account, I'll call them on it as a vioaltion of the stay.

Link to comment
Share on other sites

Here is the text I was talking about,I have a good memmory I guess!

Posted: Fri May 13, 2005 5:00 pm Post subject: Citibank Checking Account after filing - ADVICE PLEASE

You need to find another bank for your checking account. Citi has the right of setoff for ANY funds in that checking account against any of the debts you have with them. The automatic stay does not nullify their right of setoff at all, its one of the few exceptions to the stay. The lawyer is right, if you put ANY money into a deposit account at Citi, they CAN take it to apply to your other debts.
Link to comment
Share on other sites

Yikes, now I don't know what to think. Will try asking my attorney, but don't have complete confidence in his knowledge. Will post his reply here.

This atty related a small horror story about one of his clients....client was advised to change banks but did not....after a lull of a few months, payday loan sharks resubmitted his check to bank, in defiance of discharge. Bank paid check. Atty advised client, would cost more than amount lost to reclaim it.

Thanks braxas, Lady, all. Stay tuned.

Link to comment
Share on other sites

Doubtful as that transaction represents an agreement between you and the account owner. The teller is'nt going to know squat about your situation and all they really care about is that your ID matches the person whom the check is made out to. You technically have no business relationship with them regarding the money the check represents. They could charge their customary fee but that is across the board and everybody pays it when they cash a check with no account at that bank. But if you cash it and use your account status to waive the fee then whammo! I'm no expert but I would think impeding one of their customers transactions would raise the eyebrows of the FTC. Namely the customer that wrote you the check. It also smacks of garnishment with no judgement. If you keep it seperate from your business relationship with them I would think your safe. This is however only my opinion. Cash is king!

Link to comment
Share on other sites

  • 5 weeks later...

ok this has thread has gotten my attention., I bank at Bank of America. Other than the debit card they gave me for the account, I do not have a bank of america credit card that I listed as a debt. But does bank of america underwrite any other cards out there, u know like a gas card or something like that? Just want all my bases covered.

RG

Link to comment
Share on other sites

To my knowledge, BofA does NOT underwrite any other credit cards except their own right now. Citibank is a major holder for gas cards as well as consumer stores like Home Depot and Sears.

Providian underwrites cards for PayPal and other types of cards and MBNA holds a HUGE number of 'specialty' cards. With BofA buying out MBNA, BofA will suddenly be the holder of a HUGE number of credit cards.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.