ChexSystems

[msml_2020]

Hubby and I filed Chap 7 on 7/5/2019 and discharged on 11/17/2019.  We recently moved to a different state and went into a CU to open an account only to be denied because our old CU, University Federal CU in Austin, TX, that we had when we filed reported a checking account as unpaid and overdrawn.  They reported it on 8/20/2019 well after we filed but before we discharged.  We disputed with ChexSystems and got the following response:

The bankruptcy was filed prior to the date associated with the information reported to ChexSystems; therefore, the reported information on file is not affected by the bankruptcy filing.  As a result, this information will remain on file at ChexSystems.

The NSF was a result of the CU drafting our account for a vehicle that was included in the BK.  We had opened a new account with another CU in June prior to filing and were no longer using the UFCU account.  The vehicle was surrendered to UFCU in September, 2019.  

Should I send a letter to UFCU asking them to remove it, dispute it with ChexSystems again, or just accept that we're stuck with it until 2024?  It isn't mission critical that we open an account with a local CU, but we are planning to purchase a home in early 2023 and I don't want this biting us in the butt at that time.

[CH-7-Mission-Accomplished]

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@msml_2020 wrote:

Hubby and I filed Chap 7 on 7/5/2019 and discharged on 11/17/2019.  We recently moved to a different state and went into a CU to open an account only to be denied because our old CU, University Federal CU in Austin, TX, that we had when we filed reported a checking account as unpaid and overdrawn.  They reported it on 8/20/2019 well after we filed but before we discharged.  We disputed with ChexSystems and got the following response:

The bankruptcy was filed prior to the date associated with the information reported to ChexSystems; therefore, the reported information on file is not affected by the bankruptcy filing.  As a result, this information will remain on file at ChexSystems.

The NSF was a result of the CU drafting our account for a vehicle that was included in the BK.  We had opened a new account with another CU in June prior to filing and were no longer using the UFCU account.  The vehicle was surrendered to UFCU in September, 2019.  

Should I send a letter to UFCU asking them to remove it, dispute it with ChexSystems again, or just accept that we're stuck with it until 2024?  It isn't mission critical that we open an account with a local CU, but we are planning to purchase a home in early 2023 and I don't want this biting us in the butt at that time.

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I would send a very firm letter to your credit union and tell them that they overdrafted your account trying to collect on an auto loan that was included in bankruptcy.   This is a clear violation of federal law that prohibits any lender from taking any steps to collect on a debt included in the BK.    I would be polite but firm.    If they do not cooperate file complaints with the CFPB, BBB, and your state AG.

I think you are in a gray area but you have a good argument.

As far as your mortgage loan application, mortgage lenders do not check Chex.   It only impacts the ability to open new bank accounts.

Good luck.