Many times a client who comes to us has agreed to permit a creditor to withdraw money on a monthly basis from their bank account. Once we file your bankruptcy, this should stop. If you need time to file your case, then we want to stop that pending the bankruptcy. Canceling it is pretty much the same procedure that you went through to set it up, only in reverse. Here is what I suggest:
- Call the creditor, and tell then you want to cancel it. Ask them to send you written confirmation of this request.
- If you don’t get such written confirmation within a day or two, write them a letter, asking the same thing.
- Find out your bank’s stop payment policy. Many banks require five day notice, and charge a fee. If you haven’t gotten confirmation from the creditor that it will stop prior to then, you may want to consider doing a stop payment. Unfortunately, you might need to do this again the next month, so it hopefully won’t come down to this.
- In certain circumstances, particularly if it’s a creditor such as a payday loan company which may operate overseas and only communicate in cyberspace and may act as if they are above the law, you might just want to close that bank account. I prefer closing the account rather than just letting it sit there, because if the bank honors an insufficient funds authorization, then your account will go negative, and then you will get bad banking credit, which is worse than the bad credit you get from bankruptcy, because it will make it hard to open another account for a year or two.