Credit Union Question

[LostinMI]

What is the name of your state? MI

I have a line of credit (overdraft protection) at my credit union that I also have my checking & savings accounts with. If I file bk & reaffirm this debt with the credit union, what is the likelyhood that the credit union would still close my accounts? Or would they automatically close the accounts, even before I have a chance to reaffirm the debt? Could I just call the CU and ask them their policy on this?

Any help would be appreciated!!

 

[Ladynred]

If you reaffirm on an unsecured debt you're nuts, but people have their own reasons and if the court approves the reaff, its you're choice. If you reaffirm, its unlikely they'll close your accounts. However, it IS likely that they WILL exercise their right to set-off against your checking and savings when they get the notice of your bankruptcy. They'll act first, ask questions later.

Do you have any other loans with this CU ?? You'd probably be far better off to put your checking and savings elsewhere before you file and just get rid of the unsecured debt.. you have a chance at a fresh debt-free start.. why ruin it ?

 

[LostinMI]

Thanks LadynRed!! I am just not sure how to handle this.... I really like banking at the credit union, but not sure if it's worth reaffirming the unsecured debt (like you said).... and even more unsure as to whether my account will even stay in good-standing if I do reaffirm.

 

[djohnson]

I agree, but would like to add that you may also want to talk to your attorney because if you go a 13 and choose to keep this open to use it (why else would you want to keep it open) it may be against the 13 rules that state you can't obtain more debt or credit until after discharge. If you try it, be prepared that your other creditors may fight against it.

 

[LostinMI]

Thanks.... We are planning to go 7.... and I don't plan to use the overdraft.... just don't want to have to close the checking/savings accts attached to them. Also, I have kids' accts at same credit union.

Is there any reason the courts would object to reaffirming this debt?

 

[djohnson]

Other creditors may object because of preferential treatment.