If I file for bankruptcy how will this affect my account at a credit union? This is a common question that many consumers are concerned about. A common misconception is that as soon as you file for bankruptcy you will lose your credit union account and this account will be closed. This is not necessarily true, and most of the time your bankruptcy filing will not impact your credit union account in any way.
Your ability to keep your credit union account open will depend on certain factors. If you owe the credit union and this debt is listed in the bankruptcy petition then the credit union will probably not allow you to keep the account opened.
If you owe a debt to the credit union and you are willing to pay off the debt owed instead of seeking a bankruptcy discharge for this debt then the credit union may be willing to allow you to keep your account open but this option depends on the specific credit union that you belong to.
A credit union is different than a bank, and when you have an account you are a member and part owner of the financial institution. Credit union members enjoy a number of benefits that bank account holders do not. More favorable loan decisions, personalized services, and other advantages are some of the main reasons that you may have signed up for the credit union account in the first place.
If you are considered a loss risk to the credit union then your account may be closed and your membership may be discontinued. Your credit union has a duty to look out for all members, and if you owe a debt that is listed in bankruptcy and is discharged then the credit union will take a loss on thi samount.
If you file for bankruptcy and you do not owe the credit union any debt that will be discharged then your account should be fine and is in no danger of closing. In this case you do not pose any loss risk to the credit union so your account should not be compromised or closed.
If you file for bankruptcy and you do list a debt owed to your credit union this does not necessarily mean an automatic account closure either. Negotiations may occur before your bankruptcy case reaches the discharge stage, and during these discussions it may be possible to set up payment arrangements with the caveat that your account stays open as long as the scheduled payments are made and the debt is settled.
Credit unions are a very popular choice for consumers because these financial institutions are seen as being more customer friendly. This is due to the fact that account holders are also partial owners in the credit union. If you do not harm the bottom line of the credit union then usually no action will be taken with your credit union account just because you file for bankruptcy protection.
If you are unsure whether or not a bankruptcy filing will affect yoru credit union account you can always discuss this with a representative or a professional bankruptcy attorney. This step can offer peace of mind if you do not want to lose yoru account but you are considering bankruptcy to deal with your debts. An experienced bankruptcy lawyer can advise you on how filing for bankruptcy can affect yoru various accounts and assets.