CU Won't Close Account Due To...

Question:
I had $1,000 overdraft protection line attached to my Credit Union account... I filed for BK ch. 7 and I know that overdraft protection is dischargable (I owe $1,000 on it). I told them to close it... I checked online access, I still have that account as active and they can't close it because I still owe O.D. protection... So what's the deal here? what will they do with my account (I abandoned it right before I filed for BK) will they close it when I get my discharge?

Answer:
Well, you owe then $1,000, so that makes them one of your creditors. The credit union will probably handle this the same way they handle any situation where a member borrows money and fails to pay it back. So don't count on them closing your account any time soon. As I understand it (and bear in mind that I am a non-lawyer) the debt continues to exist after your bankruptcy is granted. The only difference is that after your filing, you don't have to pay and the creditor (the credit union, in this case) is not allowed to engage in collection activities. But the debt is still on the credit union's books, and they don't have to take it off the books until you pay them off (which theoretically MIGHT happen even AFTER your bankruptcy is finalized.)





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