What Happens When You File Bankruptcy on Credit Unions?

Filing for bankruptcy will impact your credit with a credit union.

Bankruptcy is a process in which consumers who face financial hardships may repay or eliminate some debt, according to Nolo.com. There are diverse bankruptcy plans that have different qualifications. Filing bankruptcy may impact your credit union account.

Objection Filing

In bankruptcy, you may eliminate your unsecured debt and restructure a repayment plan for secured debt. According to Bankruptcy Law Firms, the credit union can file an objection to recover some of its money if it believes that the debtor acted fraudulently in obtaining credit.

Membership

If you have debt with a credit union and you are going to file, or have filed, for bankruptcy, you will lose your membership in that credit union, explains the Bankruptcy Law Network. Your attorney may recommend that you withdraw your money and place it in a bank where you don't owe money.

Future Credit

If you have filed bankruptcy on debt that you owe the credit union, you may not be able to obtain credit with them as long as you owe them money. The Credit Infocenter warns that the bankruptcy may stay on your credit report for 10 years after your case has been discharged. It may impact your ability to obtain credit with any credit union.

References

• Nolo: What is Bankruptcy?
• Bankruptcy Law Network: Bankruptcy and Credit Unions
• Bankruptcy Law Firms: Why A Creditor May File An Objection to Discharge in Bankruptcy
• Credit Infocenter: How Long Do Negative Items Stay On My Credit Report?