Q: What can I do about a credit union  that took money out of my account (my SSDI) to pay off a past due bill I owed them? 

A: If a credit union took your money to collect past due payments it’s likely because they have the right to set off or the automatic right to combine accounts. This is the case when you have checking or savings accounts at the same institution where you have received a loan or credit card. From the bank’s perspective, they are setting off one account, where you have cash funds or a debit balance — in order to pay another account, where you have money due or a credit balance.

One way to prevent this from happening in the future is to simply bank at different organizations. In other words, don’t have your checking or savings accounts at the same credit union or bank where you get credit cards or personal/business loans. 

But now that the money has already been taken from your account, there is really only one thing you can do to try to recoup your money. 

You can ask for a refund. Start by letting the credit union know if you are facing financial hardship. Also, let them know that the funds they took were you SSDI payments. They may be inclined to set up a repayment plan for you … or then again, they might not budge. It will likely depend on the length and nature of your relationship with them (i.e. how many accounts you have, how much assets you have there, how long you’ve done business with the credit union, what your overall repayment track record has been, and how far delinquent your past due account was, etc). 

The bad news is that the right to set off is very strong in the bank/credit union’s favor. Lawyers say that even filing for bankruptcy, which typically puts a stay against your creditors and keeps them at bay, won’t work to stop a bank from setting off your assets when you owe them money. 

I hope this info has helped you.  Good luck!