Navy Federal Secured Card- Help!

[Anonymous]

Hi All, 

I'm currently in Chapter 13. Filed 08/2016- Trustee approved me to get a $500 secured card with Navy Federal on 1/2017. However, since then I relocated back to Alabama because my mother is currently having major health problems. I now make way less than my income as when I filed my case. Trustee wants me to convert to Chapter 7. I'm willing to do this but, will NFCU be included in the "new" bankrupcy even if there is $0 balance on the account? Will NFCU close my account since its a secured card? I'm attempting to not burn NFCU at all as I only started my membership after filing because I got married and was able to join. I have read on here they are not forgiving, I'm wanting them to help me grow because when I get discharged from Ch. 7 my plans are to finance a car and after a year refi with NFCU... I've never been down this road and I'm hoping you all can help. 

[shadanat]

The Navy Federal card does not have to be included because the balance is zero. When you talk with your lawyer about converting make sure that they don't include zero dollars accounts.

[Anonymous]

@shadanat wrote:

The Navy Federal card does not have to be included because the balance is zero. When you talk with your lawyer about converting make sure that they don't include zero dollars accounts.

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Navy Federal would be included even with a $0 balance.  The best thing to do is to close the account before converting to a BK7.  That way, you can apply again after the discharge.

[shadanat]

When my ex-husband converted his 13 to a 7, he was able to excluded his Cap One Secured card from filing because it had a zero balance. As his lawyer explained, it wasn't a debt. He just advised him not to use it until after discharge.

[CH-7-Mission-Accomplished]

Some lawyers (like mine) send a notice to everybody on your credit report just to be overly safe.  (Perhaps you had some pending charges or whatever).    Also most lenders subscribe to a monitoring service where they are alerted immediately by the credit bureaus to changes in your reports, new BK's, etc., so even if they are not included in the BK7 matrix, they close your account.   (Sometimes some store cards sneak through and remain open).

I would just chill out till you get your discharge on the 7.   It will only be a few months after you file it.   And when people say Navy is unforgiving, they only mean if you stiff them for any $$$.   They are nicer to BKers but I would start the credit relationship when you have a new clean slate.   If you want a secured card to start now, get the OpenSky one.   It's no credit check and once you get better cards down the road, you can close it like you would any of the dog poop cards (Credit One, First Premier).

[Anonymous]

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@shadanat wrote:

The Navy Federal card does not have to be included because the balance is zero. When you talk with your lawyer about converting make sure that they don't include zero dollars accounts.

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Let's clarify this a bit: You do not have to list in your schedules accounts for which you owe no money. Listing it on your schedule will make no different to Navy Federal -- they will likely find out about the bankruptcy filing and close the card immediately. Lenders usually close cards pursuant to a clause in the credit card agreement that says if you file bankruptcy you are in default. 

Unless you have made arrangements with the bankruptcy department to keep the account open (not even sure if this is a real possibility), I would take the other poster's advice and close the card first.

Some lenders will report the account as "included in bankruptcy" if you do not close it prior to filing. Most consider a "closed by consumer" description better than "included in bankruptcy." I don't know how Navy Federal reports $0 accounts closed by the bankruptcy department, but it can't hurt to check with them first (after redeeming any reward points).