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NFCU : Freezing your account after filing Bankruptcy

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NFCU : Freezing your account after filing Bankruptcy

Will NFCU freeze my account after filing my Chapter 13 ? I do have a car loan with them and i am going to reaffirm it 100% . My Social Security goes in my account and also my VA disability . I read they were sued years ago for doing this by the CFPB . I need to access my money to keep the lights on . Please Help . Thank you . A Disable Veteran
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Senior Contributor

Re: NFCU : Freezing your account after filing Bankruptcy


@Bob872 wrote:
Will NFCU freeze my account after filing my Chapter 13 ? I do have a car loan with them and i am going to reaffirm it 100% . My Social Security goes in my account and also my VA disability . I read they were sued years ago for doing this by the CFPB . I need to access my money to keep the lights on . Please Help . Thank you . A Disable Veteran

This link should help some and you need to post these type of questions in the BK forum, you will get more replies that waySmiley Happy

 

https://ficoforums.myfico.com/t5/Bankruptcy/BK7-Guide-Filing-to-Discharge-What-to-expect/td-p/567966...

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Valued Contributor

Re: NFCU : Freezing your account after filing Bankruptcy

Sorry but your bankruptcy lawyer should have told you about this. It’s in the fine print when you join a credit union. Only credit unions have this authority, unlike banks. It’s call cross collateralization. Call your bankruptcy lawyer immediately.

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Re: NFCU : Freezing your account after filing Bankruptcy


@Morpho wrote:

Sorry but your bankruptcy lawyer should have told you about this. It’s in the fine print when you join a credit union. Only credit unions have this authority, unlike banks. It’s call cross collateralization. Call your bankruptcy lawyer immediately.


Banks absolutely have the authority to do this as well. It’s the whole reason I left US Bank when I filed mine because I owed them money on a PLOC and credit card. I moved all my banking to a credit union before I let my friend file the paperwork with the court.



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Valued Contributor

Re: NFCU : Freezing your account after filing Bankruptcy

Yes, you’re right. From Edmunds;

”Banks also can have cross-collateralization clauses in their auto loan disclosures, but Keith Leggett, senior economist and vice president for the American Bankers Association, says he's rarely heard of either big banks or community banks making use of such a clause”

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Regular Contributor

Re: NFCU : Freezing your account after filing Bankruptcy

Bob, if you can move your direct deposits, it would be beneficial. It's a pain, but it's the safest way to protect your money. Also, in a Ch 13, you have the option of doing a cram down and only paying the value of the car (there are exceptions to this). That's a way to get around the cross collateralization issue, if you have other unsecured debt or deposit accounts there. However, they could still freeze the account and make your attorney argue that the automatic stay has been violated, etc. Your safest bet is just to open an account somewhere else.
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