Phone: 717-304-1841   Email: cutaialaw@gmail.com

Credit Unions are different from banks in that they are member organizations - and they advertise that as an advantage - we are all just one, big, happy family.  Unlike an actual family, when a member files bankruptcy, the credit union disowns you and cancels your membership, because it feels you area risk to other members.  This can happen even if you don't owe the credit union any money.  Banks don't do that.  If you file bankruptcy a bank won't close your checking account.

Credit Unions also exercise their right to a set off.  This means that if you do in fact owe a credit union any money, and you have money in a bank account with that credit union, and you file bankruptcy, the credit union will take the money you have in your account at the time you file bankruptcy.  Banks generally don't do this although they can.  Which is why you should remove ALL money from any credit union you owe money to - even a car loan where you are up to date on the payments and intend to keep - prior to filing bankruptcy.

Credit Unions have been known to cancel members' ATM cards upon getting notice that a member has filed bankruptcy, so even thought the credit union has no right to a set off and is not owed any money, it still cancels debit cards and still cancels memberships.

Bottom line:  Before you file bankruptcy, remove all your money from any credit union account, and stop any direct deposits from hitting that account.  Then open up a bank account at either another credit union - or better yet - a bank.