If you are about to file bankruptcy in North Carolina, you should consider a few possible risks this may pose concerning accounts you may have at credit unions. Although their are certain discharchable and non-dischargable debts in bankruptcy, credit unions operate under a differerent set of regulations.
If you have loans, checking, savings, or credit accounts at a credit union and are considering filing for bankruptcy, it is imperative that you discuss your plans with a bankruptcy attorney before filing. Consolidating all of your accounts into one financial institution, like a credit union, may have seemed like a wise idea. However, some credit unions may include terms in the fine print of your account information that require them to freeze all your accounts in the event you file for bankruptcy. This may provide them the power to repossess your vehicle if you have a car loan with them.
Some credit unions include "cross-collateralization clauses" and other terms when you open accounts with them. These clauses may make you liable for debts even though you are filing bankruptcy. For example, if you have a credit card and a car loan through the same credit union, there is a possibility a clause is present in your terms of service. This clause may pose a lien on your car if you do not pay the balance on your credit card. In this scenario, even though you may file bankruptcy and expunge your credit card debt, you would still need to pay the credit card debt since the credit union would put a lien on your vehicle.
There are other concerns credit union account holders should review if they are considering filing bankruptcy in North Carolina. Finances are a personal topic and our bankruptcy attorneys in Raleigh, Fayetteville & Dunn honor the confidentiality of our consultations. Let our lawyers know if you have questions about bankruptcy, how it may affect your future credit, how you can keep your home, and more.