Chapter 7 and 'SET OFFs'

[bnscarfan29]

What is the name of your state?NY
Hi, I recently posted a question about this topic. My wife is filing Chapter 7 BK but I am not. We have a joint bank account at a credit union that issued her a credit card, that she is listing to have discharged. We just had a meeting with our lawyer and I told him what I learned about Set Offs, and told him that I was concerned that this account would be frozen. He looked at me like I had two heads and asked me where I got this rediculous information from. He said that there was no way for any bank to put a freeze on your account because it simply is not their money. According to him the only way for a bank to do this is to go through the courts and obtain a judgement against you.

Could it be that this is a state by state thing, and maybe does not apply in NY? Or could it be that my lawyer is misinformed?

Thanks!

 

[Ladynred]

If I had your lawyer.. I'd be worried !!

The bank's right to set-off is one of the few collection efforts that is NOT stopped by the automatic stay !


This came straight off of the website of a very good BK attorney in my area. He's been doing bankruptcies for 25 years and he is the best guy around here.

"THE AUTOMATIC STAY AND YOUR CREDITORS
First, a bank, savings and loan, credit union, or other institution in which you have a deposit, is allowed to take the deposit and setoff all funds which were in the account at the time you filed your bankruptcy petition against any outstanding debt that you have with that institution. "

I suggest you ask your attorney again.

 

[djohnson]

Just wanted to tell OP I completely agree with Lady here. It can be set off. I know many people this happened to. Even where a parent had put a childs name on an account years ago when they were having surgery and never took off, but both forgot about it. Boom, kid files and dad's money is all gone. Completely legal.