Financial crisis can hit you at any point of time in your life and situation can be such that you may have to file bankruptcy in order to get rid of it. Filing bankruptcy and getting the debts with a bank discharged does not mean that you will never be able to take out loans from them. However, the situation is different in case of credit unions. If you try to eliminate and get a discharge from all the debts of a credit union, you can forget any further association with them in future.
Let's take a look at the 3 situations which may arise when you are dealing with credit unions and bankruptcy:
Situation 1: Reaffirm mortgage and the personal loan/credit cards
Though you file bankruptcy, you may be able to keep paying your mortgage and personal loans or credit card debts that you have with your credit union if you reaffirm them. This will help you keep on banking with the credit union. Before you file your bankruptcy, you should inform the credit union about so that they can note your account. Thus, the bankruptcy filing will not interrupt any banking activities. However, you should note that once you reaffirm your mortgage and personal loan or credit cards, you will once again become personally liable for paying them off in full. If you cannot pay off the dues, the credit union will have the rights to sue you.
Situation 2: Reaffirm mortgage but get a discharge from personal loan/credit cards
You may eliminate your personal loans or credit cards but keep your mortgage with the credit union after you file bankruptcy. Thus, you can reaffirm your mortgage loan only. In such a situation, the lender will not be able to foreclose your property if you keep on paying your mortgage. However, you will not be able to bank with the credit union any further. You may not be able to close down your bank account but again, you may not be able to put more funds in the account. Once you stop paying the personal loan or the credit cards after bankruptcy, they may take away the funds in your account.
Situation 3: Get a discharge from both the mortgage and personal loans/credit cards
If you get rid of your debts and choose to eliminate your mortgage and personal loans or credit cards, then you will have to forget about your relationship with the credit union. If you choose this option, then you should make sure that you do not put any further funds in your credit union account. Your relationship with them will be permanently over.
Many experts opine that it is not worth reaffirming your mortgage and credit cards or personal loans just to maintain a good relation with the credit unions. But there are many people who do reaffirm their debts and continue to receive benefits in the future. Thus, the sole discretion in this matter will be yours.