They Took Money From Our Account...

[enternow]

I have a business card I haven't been able to pay for a few months.

They took 1k out of our business account and said they were exercising their right of setoff. Is this ok and what does this mean?

thanks,
Jerome

[liz417]

Yes, if you have a loan and a checking account with the same bank...it's called cross-collateralization. You the docs you signed (when you opened the account), it would state it in there.

Good Luck!

[enternow]

how often?...

Yes, if you have a loan and a checking account with the same bank...it's called cross-collateralization. You the docs you signed (when you opened the account), it would state it in there.

Good Luck!

How often can they do this and for how much?

thanks,
Jerome

[AngelinaCat]

From what I have read, just about any amount and any time they want to do it. My suggestion is to close that account and move it to another bank.

Here is the link to lajazz947's experience:

http://www.bkforum.com/member.php?u=15177

[qwertysue]

If they take more than $600, they'd be then dealing with preferrential payment issues. My guess is they would stay at $599 every 6 months or so.

[AngelinaCat]

I don't think the CC companies care one lick about preferrential payment issues that their draw would cause enternow when he files. From his post it appears that $1000.00 was taken in one draw.

[drowninginflori]

Have you already filed? We had the same problem with our credit union and were forced to change banks. If the money is there and you owe it they will continue to take it out until you either close it or the loan is paid in full. However, if you have already filed and they took it out they would be going against the stay and any payments taken could be looked at as preferential. Change banks fast!!!!

[Frogge]

Close your account there and take the money somewhere that you have no loans. I worked in a bank, they can take payments on a defaulted note /CC anytime they want to. Sometimes at the end of the month for reporting reasons, or whatever. Point is, it's there for the taking and you just need to get it out of there ASAP. Good luck

[pa308]

Can they take money if you are current?

[liz417]

Can they take money if you are current?

No, only if your behind in payment(s).

[HHM]

Execution upon an account is never a preferential payment. When a creditor exercises their rights under contract or via a judgment BEFORE a person file BK, there is no preferential payment issue.

Preferential payment is only an issue if the debtor voluntarily pays a creditor.

As to the right of set-off, yes, for many business type credit cards, they can pull money money from an account that is linked to the business within the same institution.