Can a bank stop auto pay onmy loan frommy checking without notification if my husband filed bankruptcy?

UPDATED: Sep 19, 2011

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Can a bank stop auto pay onmy loan frommy checking without notification if my husband filed bankruptcy?

My husband filed bankruptcy on a credit card after he lost his job and couldn’t find work. He reaffirmed on everything but his credit card. He is a co-signer on my car loan. The loan is primarily in my name and the checking account that pays it through auto pay is in my name only. The bank got the bankruptcy notice and stopped the auto pay without telling me. They are also now charging me a $30 late fee saying they were not allowed to contact me about the loan whatsoever. This doesn’t seem fair. My name is not on the bankruptcy at all. It is solely my hubby filing on his credit card.

Asked on September 19, 2011 under Bankruptcy Law, Ohio


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If your husband is a co-signer on your car loan and he filed for bankruptcy protection, the bank where the automatic pay for this loan was being made out of your own separate checking account in order to not be in violation of any automatic stay orders under 11 U.S.C. section 362 concerning your husband's bankruptcy put a hold on the payment since it was being made to a creditor of his listed in his bankruptcy schedule.

Whether or not you deem the bank's hold on the automatic payment from your own separate checking account fair or not, the bank's payment to a creditor of your husband under the joint loan could have created problems for the bank with the bankruptcy court.


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