Credit Unions and Bankruptcy

Credit Unions and Bankruptcy

Credit unions always ignores doing business with the people that involves in any kind of bankruptcy, but they're also cautious to avoid violations of bankruptcy law.

Automatic Stay

According to attorney Daniel Mc Garry, when a debtor files for bankruptcy, he has protection from actions by the creditor. Most of the credit unions write into to their member agreements that the bank has the right to make an unsecured debt, when they deals with a bankrupt credit-union member then they tries to avoid violating the "automatic stay" statute of U.S. bankruptcy code.

Significance

Generally credit unions support legislation because it costs taxpayers and credit unions money and they makes it tougher for people to declare bankruptcy.

Effects

According to McGarry, Credit union may deny extending further credit to a member who discharges debt during a bankruptcy but this doesn't mean a person who declares bankruptcy can't use the services of his/her credit union.

Tip

According to Bankruptcy Law Network, those considering filing for bankruptcy should take their money out of their credit union and putting it in another institution to prevent the credit union putting a freeze on their account to offset possible future losses. 

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Credit Unions for Kids

Credit unions are not-for-profit financial cooperatives that provide savings, credit and other financial services to their members. It is owned and managed by its members. The main objective of Credit union is to provide a secure and convenient place where members can save their money and where loans are available at reasonable prices. 

The major difference between a credit union and a bank is that a bank is for-profit organization whereas a credit union is a not-for-profit organization. Therefore it provides better rates of loans for the benefit of people. Everyone can benefit from a credit union. Kids are also not an exception for being a beneficiary of the credit union services. There various benefits of credit union such as:

• Non-profit Status

In credit union no stockholders are looking at the return on their investment

• Inclusiveness

Credit unions have gained so much good reputation allowing spouses, siblings, and children of members to join.

• Owned by Members

The members of credit union are the owners. This means they are not working for profit but for public good.

• Personal attention

As credit unions are smaller than banks therefore personal attention is provided to every member.

Saving money is an excellent habit and everyone should try to save money. Nowadays, parents want their kids to save money so that kids have the habit of saving money. Credit unions are the best option for kids to save their money by opening an account and keeping it in a safe place. There are many reasons for why kids should choose credit unions and these are mentioned below:

• No Account Keeping Fees

Most banks have fees for account keeping but credit unions have no account keeping fees which is a great advantage especially for kids.

• No Transaction Fees

Credit unions don’t charge for any transactions.

• No Minimum Opening Balance

As banks require some minimum opening balance so it’s difficult for kids to open an account in banks therein credit unions serve the purpose well.

• Ability to Perform Direct Debits and Credits

It is also an advantage for kids that they can easily debit from or credit to their account as and when required.


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