The Automatic Draft Entanglement Set Up
Creditors are notorious for wanting to set up an automatic bank draft for monthly debt payments. Many companies like insurance companies will draft your account on a regular basis to make their premiums and offer you a discount if you will allow them to make an automatic bank draft. What happens to the automatic bank draft when you have a financial catastrophe like a job loss and don’t have the money in your bank account to draft?
Over drafting can get very expensive in bank penalties and fees, but getting a creditor weaned off of control can sometimes be a very difficult thing to do. The automatic bank draft is the debt collector or debt settlement company’s favorite way to move money from your account to theirs, but when you decide the relationship has no future, how do you extract yourself from the automatic bank draft entanglement? It really isn’t always that easy or clear.
Personal Bankruptcy Story Illustrating Difficulties in Stopping the Automatic Bank Draft.
Consider this personal bankruptcy story that was shared on a bankruptcy forum website: “Last month I went online, downloaded all my statements onto a thumb drive, canceled my automatic bank draft payments, or thought I did, and then changed my telephone number to Google Voice and hunkered down.Some banks immediately started calling me up to 10 times a day, and evidently one didn’t get the message apparently. They STILL debited their $500+ minimum from my account and overdrew me by $300! How do you get them to stop and are overdrafts discharged in a bankruptcy filing?”
Federal Trad Commission and Bankruptcy Laws Help Stop Automatic Bank Drafting
If you do not file for bankruptcy, you can get them to stop over drafting under the Federal Trade Commission laws by notifying your bank in writing to immediately stop the automatic drafts of your account. They are required to do so and can be ultimately held responsible if they do not comply.
You can also file a bankruptcy to stop the automatic drafts, and the automatic stay will immediately force the creditors to cease all collection activities, including immediately suspending the automatic bank draft. They can be in violation of the automatic stay of the bankruptcy court if they continue to take the automatic drafts. If convicted of a violation of the stay, you stand a chance to receive $1000 plus lawyer fees for the violation.
In addition to getting the automatic bank drafts immediately stopped, certain bankruptcies can discharge overdrafts if you qualify for that type of bankruptcy. So filing a bankruptcy not only gets your creditors who automatically draft your banking accounts to immediately cease the practice, it also can get you forgiveness of the overdrafts under certain circumstances.
How to Proceed Against Creditors Who Might Overdraft Your Accountant
It is never a good idea to tackle overbearing creditors by yourself. If you are filing a bankruptcy to curb over drafting practices, it is a good idea to have a bankruptcy lawyer on your side.
- Can Your Bank Accounts be Frozen During a Chapter 7 Bankruptcy? (betterbankruptcy.com)
- Is There Any Defense Left After a Motion of Stay Has Been Granted? (betterbankruptcy.com)
- Is a Creditor Continuing to Contact You After Bankruptcy? (betterbankruptcy.com)
- Collections, Charged Off Debt, and Bankruptcy (betterbankruptcy.com)
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