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Return of Deposit for Secured Credit Card
Jeff:
This has come up before when banks freeze debtors accounts on the filing of
the bankruptcy. This issue seems to me to be governed by 542(a) which
requires the holder of property of the estate, even if claimed as exempt by
the debtor, to turn the property over to the trustee unless the property is
of inconsequential value to the estate. The trustee doesn't want it in her
or his hands because it is exempt and I assume they would have to account
for it and do whatever else they have to do that would cost time and money
with no return. The bank doesn't want to get crossways with the trustee, so
they won't give it to the debtor and of course they could not care less
whether the debtor had food on their table. So the debtor just gets screwed.
If you have any questions or concerns please contact me.
Pat
Patrick T. Green
Attorney at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
Email: pat@fitzgreenlaw.com
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A Ch7 client had a secured credit card with Capital One with no outstanding balance due at the time of the Ch7 filing. Despite the fact that there is no money owed to them and they have closed the account, Capital One is taking the positino that they will NOT refund the client's security deposit until after the Ch7 disharge is entered???
Anyone run into this before? Under what authority can they do this? Is it a violation of the automatic stay or just plain conversion?? or something else?
The post was migrated from Yahoo.