Credit union kicks us while we're down

The BBQ Pit
81

I don’t have a problem with creditors attempting to collect their debts. What’s a little icky here is that this creditor was able to raid the OP’s checking account simply because she happens to have a checking account with the lending bank. The electric company, for example, does not have similar power. Note that this doesn’t just suck for the OP; it also means she can’t pay her OTHER creditors (which is one reason why the BK code has avoidance provisions).

It’s all perfectly legal, though, and my point is more that I think it’s a little shortsighted by the bank. The financial industry probably spends billions of dollars on cross-marketing; stories like these could continue to undermine those efforts long after the recession passes, because customers will be leery about borrowing from the same banks where they have deposit accounts.

I suspect, moreover, that the bad loan is a sunk cost. Maybe they’ll get to keep the money they grabbed, maybe they won’t, but it’s not likely that that represented more than a couple weeks’ cash flow anyway, and they certainly won’t be able to get away with it more than once. The rest of the banking relationship, on the other hand, had positive value. They’re throwing good money after bad.

82

From the banks perspective there is not that much that they likely can get out of the relationship. Someone that is defaulting on loans certainly won’t have a large checking account balance for a long time to come. The bank also has to be concerned about how likely they will be to continue to pay the mortgage. They are already defaulting on one loan, how long before they will default on the mortgage as well (or declare bankruptcy). The fact is banks wants positive relationships with people that will pay back their loans, not deadbeats that they risk losing their money to. While I don’t see the OP as a deadbeat, the bank does and it is understandable why they don’t care about having a future relationship with her.

83

This, of course, is based on the possibly false assumption that the customer’s financial situation will never improve. If someone defaults on a loan because of job loss and then gets another job, do you think that they’re likely to continue to do business with a bank that treated them like this? Or recommend that bank to their friends? As an example, just look at what happened with Poysyn; not only did the bank lose one customer, they lost any other potential customers who read this thread and thought, “Well, I was thinking of opening an account there, but now I won’t.” And in these days where there are sites online that collect info like this, this is no small consideration. When I was planning to move down to NC I was considering renting at several different places, and I decided against several of them because of on-line reviews about the poor quality of the management.

84

Even if the OP were a deadbeat (maybe she is, who knows), they aren’t getting much more out of her than they would have otherwise. She’s going to start parking her money elsewhere, paying other creditors instead of the bank, and she might dump them in BK anyway. The bank probably does not come out very far ahead.

If she’s not a deadbeat, her goodwill will be worth something again sometime in the future. Maybe sooner rather than later, if she has any influence over other people’s banking decisions.

Smart business is not about saying, “Screw those deadbeats, we don’t want to see them anymore anyway.” It’s about recognizing that you’ve already taken a loss one way or another, and making the best of it going forward. You can’t pay dividends with moral victories :wink:

FWIW, I’ve known a couple of people who worked in internal collections, and maintaining customer satisfaction was a big part of their job.

85

With the way things are now maybe you not paying was also kicking the credit union while its down!

86

I would like to say that it was a few weeks later and I got a call from one of those surveys asking how your satisfaction is… I was about to beg off until they said they were calling to research how the bank was doing…

I said, “Oh, I have all the time in the world for this survey…”

I realize it was a small drop in the bucket, but it felt good.

87

Once again, what do you think the credit union should do in this situation? Should everyone who has defaulted be allowed to keep the money in their account to use for whatever they want or is it just Dopers who post here?

The OP and her hubby have been on the brink of bankruptcy for at least a few months so it seems as if they probably owe a lot of money to other people as well. In that thread I linked to she mentions that she owes more for the house than what it is worth so it sure seems like the credit union is going to get screwed regardless. It seems pretty doubtful (per the info the OP has described on the board) that things are going to turn around significantly anytime soon.

So the credit union should bend over and take it because the OP probably won’t do business wiht them in the future? Nothing like suggesting a little fiscal blackmail to try to even the score, eh? When the OP tells the story to people in the future do you think they’ll include all of the info or just that the credit union STOLE THEIR MONEY even though they didn’t. If the loan terms say the credit union can debit the money from their account (and let’s face it, it probably does) then they aren’t stealing anything.

I’m sorry, but the entire “OP won’t do business there or tell her friends to do business there in the future!” seems akin to cheating on your husband and then telling all the women you know to stay away from him because he’s a bad spouse.

They owe money they aren’t paying and probably haven’t been paying for some time. The economy is bad and the OP is in an unfortunate situation. The credit union is a business that doesn’t want to fail (like the OP’s business did) so they can continue to pay their employees and make a profit.

From the bottom of my heart I hope the OP and her family can turn things around and have better times ahead. I guess I just don’t live in a world of rainbow paths and lollipop trees where businesses are obligated to take hits for all of their customers because some people might not want to do business with them in the future for their bad ol notion of wanting to get paid for the money they loan.

88

Wow, leave a thread for a few days and you get turned into a deadbeat. :smack:

OK, so here’s the short version of the story. In 2006, I went back to school for advertising/graphic design and worked in the school’s ad agency. Big cut in pay, but with the huz’s job we were fine. I finished school, and because I was a big believer in what the company was doing (helping misfit creatives find jobs that will allow them to use their talent), I stuck around even though I could have gotten a higher-paying job at that point.

Shortly after that, the CEO needed someone to help him run the company and invited me to be a partner. We had the money to make a small investment, so we did it. The business had problems, which I was aware of, but I thought I could help him straighten things out. I was wrong. He was difficult to work with and made some very bad decisions. I ended up going without pay for a significant amount of time, and my husband and I were drawing on things like our 2nd mortgage and our line of credit, as well as credit cards, to cover our living expenses while we tried to right the company ship.

Yes, it was a bad decision to stay, but we were invested and didn’t want to just walk away.

Once it became inevitable, we closed the company, and I was lucky enough to land a job right after that. Unfortunately, that was in February, about the time there was no credit being given to anyone. My employer couldn’t secure the loan that he needed to keep his own company going with the expansions he’d done (new location and a couple of new employees), and he closed down in March. Which, along with my husband losing his job at the same time, is how we got here.

So, no, it wasn’t big-screen TVs and McMansions that got us here. It was an investment that didn’t work out and a job that fell through. We live very modestly (small house, one car, no fancy electronics, jewelry, etc). We’re responsible people who make paying debt and living up to our obligations a priority. It kills me that we’re in this position, but the options are being slowly eliminated. At this point, we’ll probably end up losing our home as well.

And to those of you who are correcting me on the “stealing” comment, I’m aware that the bank didn’t actually steal from us. But when money is taken without your consent, that’s how it feels. Hyperbole, folks. It’s a legitimate communication tool.

I don’t deny that the credit union had the right to do what they did. But as several people pointed out, it was the lack of notification and the fact that we ended up with absolutely nothing to work with. We’ve had a shitty several months already, and this was just another dog in the pile on top of us. That’s why I was saying they were kicking us while we were down. Again, expressing my feelings about this, not saying they’re out to get us.

mmmm-kay? I’m not playing the victim of the Big Bad Bank, I’m expressing my anger over a situation that we have very little control over.

Oh, and to answer the all-important haircut question: they were very nice about it. I called my mom, and she loaned me some money to take care of it. I ran out to pick it up and went right back to the salon. They didn’t act the least bit upset by it. I included a nice tip too. I WILL be returning to them–with cash next time. :slight_smile:

Thanks for all the good luck wishes, too, everyone.

89

Absolutely. Businesses have an obligation to their employees and their creditors. Of course I understand that. But doesn’t a customer, who has made every payment up till the time we called and said “We’re in trouble” deserve at least the consideration of a phone call to let us know the money has been taken out? Or to say “let’s work out a deal or we’re helping ourselves?” Something along those lines.

Nope, what I’ll be inclined to tell people is that the credit union is more bank-like in the way they treat their customers and that their customer service is great as long as you’re doing well. Get into trouble and the niceties go away almost immediately.

As Broomstick pointed out, they were helpful in reducing our mortgage payments to interest-only. That was great. The problem was that even that reduced rate was pretty unmanageable for us, and they wouldn’t even discuss other payment options about the line of credit. It was all or nothing, so we had to choose nothing.

Yeah, we probably could’ve done more to work with them, I’ll admit that. However, there were other wolves at the door and we had to start making some choices. Our top priority has been job hunting and doing freelance to keep some cash flow going. Something had to come second, and that was engaging in fruitless negotiation with our creditors.

I’m not saying we’re perfect and the credit union is evil. I understand that it’s a business and not a charity. But good customers (as we were until March) deserve a bit more consideration than we received.

It’s a frustration I’ve had with the employees mentioned in the thread Sleeps with Butterflies linked to (Thanks for digging that up, by the way. I was just thinking I should do that and you saved me the trouble. :)). That the actions they and our creditors have taken makes it seem like they think we have the money and we’re just not giving it to them. That if they harass us or threaten us or take us to court that we’ll relent and pay up. None of those things will make the money magically appear in our bank account. If they did, we’d gladly cough it up and make everyone happy.

90

So you chose not to pay back a loan you agreed to. That’s pretty much the definition of “deadbeat”.

91

Thank you Carol. I appreciate you taking the time to share your thoughts with us. Have a great night.

92

You too, and pay (all of) your bills on time.

93

Yes, they didn’t have enough money to meet all their financial obligations, which were not the result of profligate spending, due to circumstances which were not of their own choosing, so they had to make some hard choices as to which bills they would pay. Yes, one of the definitions of the the word “deadbeat” is “one who does not pay their debts”, but the common usage of the word carries the implication that the nonpayment is done out of a lack of responsibility, not because of a lack of available funds.

Let me give you the definition of another word that starts with a “d” - douchebag; Carol Stream.

94

I realize that you believe that they should have done without food and slept on the sidewalk rather than default on a loan that they could no longer pay back, but most of the world is not that sort of wretched and cruel puss stain that thinks people should crawl off and die rather than default on a debt. Of course, we realized long ago that you are not like the majority of the world and that you utterly lack empathy and compassion.

95

I wonder how the employees that didn’t get paid at her failed business felt when they had to do without food and paying their bills even though they put in the work but didn’t get paid for it?

96

It was of their own choosing. They chose not to meet their financial obligations, in favor of “job hunting and freelance work”.

97

And when tax time rolls around, don’t be a thieving dead beat and try to find ways to weasel out of your obligation to the society you live in.

98

But what could be more irresponsible than embarking on a plan that relies on funds never stopping being available? :rolleyes:

Of course the credit union DID do that when they extended a line of credit to the OP, but I suppose that’s different, somehow. :rolleyes::rolleyes:

99

Yes and no. They were job hunting after both having lost their jobs. Saying that they chose not to pay in favor of job hunting is a slight mischaracterization. On the other hand, they also chose to put the money towards preparing for the job hunt instead of paying a bill. The merits of this are debatable: handle a debt now and potentially hurt your chances to do so in the future due to a poor interview appearance and such vs. not paying a debt in order to be in a better position to continue to do so in the future.

100

Having been on the other side of that - an employee of a business that couldn’t make payroll - the employees have to make the choice to stay or go. Did she not say in that very post you linked to that most of them quit? If the company is in dire straits, can’t make payroll, and you stick around you are taking a chance.

Yes, it’s very ugly. However, just as the bank/credit union (I’m still not entirely clear on which sort of financial institution the entity referred to in the OP is) did nothing illegal, neither did moonsunstars. Unwise, unethical… there is a lot of ways to describe what occurred, but the two people in the OP winding up homeless and starving will not change that.

You might look at it as what goes around comes around - there is domino effect occuring here. First their business fails, they let down their employees, then their own finances fail…

How in the hell do you expect them to pay their financial obligations back with no job? Or are you actually ignorant enough to think that employment is going to be enough money for long enough to actually allow them to pay back two mortgages and a line of credit?

I think you fail to understand that at this point it is impossible for them to pay back their current debts. It’s not a matter of being willing or unwilling, it’s not possible.