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Knowledge Base Article

Chapter 7 and continued membership

If a person files a Chapter 7 and reaffirms all of the debt they have with Delta Community, will this negatively affect the approval of future loans with the credit union? Also, if a person does file Chapter 7 Bankruptcy and reaffirms Delta Community debt, will their accounts be closed?

If a member files Chapter 7 and wishes to repay all Delta Community loans on their account by legal reaffirmation, the member can maintain credit union services, including applying for future credit. However, there is a waiting period for obtaining future credit as follows:

Secured Loans - Member must wait 12 months from the discharge date to apply for collateral loans such as automobiles, boats, secured Visa, etc.

Unsecured Loans - Member must wait 36 months from the discharge date to apply for unsecured loans such as a personal advance loan, personal line of credit, Visa, etc.

Mortgages - After you have filed bankruptcy protection or liquidation, you will wait four years before a traditional mortgage lender will qualify you for a home loan with market interest rates. And that will happen then only if you have taken steps to improve your credit and are in a good enough financial position to handle the loan.

If the credit union suffers a loan loss on an account, the member loses all credit union services. Suspension of services may include, but is not limited to, closing Checking Accounts, being removed as a joint owner from other Delta Community accounts, revoking Courtesy Pay, payroll deductions of loans, direct deposit, check cashing privileges, Self Service IVR, co-op shared branch transactions, cancellation of ATM/debit card and lines of credit including overdraft protection, personal line of credit, home equity and Visa. The member's account will be closed and ultimately be expelled from the credit union.

For additional information regarding a bankruptcy action please contact our Bankruptcy Department at 404-677-8626 Option 1.