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Set Off Post-Petition
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On a minor note raised by your post, I have seen some posts which indicate
that sending a copy of the bankruptcy discharge notice to Chex will get your
client removed from the Chex system. I hope to get more confirmation that
this is the case.
Banks have a STATUTORY right of offset, it is not merely contractual.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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Hello,
In the case where a debtor owes the bank/credit union where he has his checking/savings account money due to a credit card or line of credit:
Post-filing, can the bank satisfy the pre-petition obligation with either A) exempted pre-petition funds in that account; or B) post-petition earnings deposited into that account?
For A) - I have read some creditor blogs before where banks make the argument that their contractual right somehow trumps the state exemption laws -- but I highly doubt this...
For B) - I realize the automatic stay would, at least initially, prevent the bank from setting-off, but I read somewhere that the bank can either file a motion for relief or just wait for discharge.
Normally, I would just have the client open up a new bank account and be done with it. However, I have a client who is on ChexSystems and cannot find a new bank that will open an account for him despite his best efforts, and we have his current credit union listed in Schedule F for a substantial amount of money.
Your thoughts are very much appreciated.
Thanks,
Donny Brand
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