Right of offset

[Lajazz947]

DO NOT have a checking account at the same bank that you owe money to.


They have a " right of offset " and can take your money to pay a delinquency and they don't care if you plead, have to eat cat food, live in a box whatever.

Wells Fargo took my house payment who I was going to pay to my mortgage company right out of my checking account ($ 3500 ouch)

I now bank with another bank who I owe nothing to.

[liz417]

Thanks for the heads-up Lajazz. I was concerned about this topic too, I have read about it a few times on different threads (i think it's called cross-collateralization) was very concerned. Spoke to my lawyer about it last week.

[Heartburn]

May I ask?
I bank with BOA. I have a cc with BOA although I did not get it from that bank. The cc account was originally with Fleet and BOA took over. Should I be concerned as well?

Thanks.

[AngelinaCat]

May I ask?
I bank with BOA. I have a cc with BOA although I did not get it from that bank. The cc account was originally with Fleet and BOA took over. Should I be concerned as well?

Thanks.

Yes.

[Lajazz947]

May I ask?
I bank with BOA. I have a cc with BOA although I did not get it from that bank. The cc account was originally with Fleet and BOA took over. Should I be concerned as well?

Thanks.

Yes 2

[Lajazz947]

If I can help one person in a worse situation than us I am happy to do so.

Thanking God for the good stuff, cursing the bad.

[Heartburn]

Uh-oh. Let me ask you this...what if the balance in my checking account is less than what they are now saying is my minimum amount due? Are they allowed to take less than that min. amt.? We never have much in there, as we are currently pay check to pay check.
I have been thinking about closing my checking account. When the time comes, will closing that account look suspicious to the court?

[Lajazz947]

They will take what they can.

I don't think that closing the account will matter given you circumstances.

If you are living lavishly then yes it might raise a flag but most of us are not.

[Heartburn]

Thanks Lajazz.
That's scary to know someone can take your money like that without warning.

[Banko]

Wf

I work for Wells Fargo and they do this alot. Very good advice!!

[kmb]

We had a credit card with Fifth Third that we included in our Chp 13, and we have 3 accounts with them. They haven't touched a dime of our money for the credit card, so each bank must make their own rules. They are only getting 26% of the money back, and we filed over a year ago, and so far, no problems.

[magyar123]

We had a credit card with Fifth Third that we included in our Chp 13, and we have 3 accounts with them. They haven't touched a dime of our money for the credit card, so each bank must make their own rules. They are only getting 26% of the money back, and we filed over a year ago, and so far, no problems.

That's because you filed bankruptcy, and the automatc stay prohibits them from robbing you of any funds.

[WhatMoney]

You need to have signed a cross-collaterization agreement, or words that say the same (legalese can be tricky to decode) before they can offset one debt with other funds. All credit unions do this, and some banks may also. Well Fargo is one of the worst banks to do business with.

I had a Providian CC that was taken over by Washington Mutual. I had stopped payments before it was taken over by WAMU. I still have checking accounts with WAMU and my accounts are safe - there was no cross coll. agreement with the bank. It's been three years since I defaulted on the Providian/WM card, and I have not declared bankruptcy,

[Frogge]

Yes, I'll just chime in with more of the same. I've worked at credit unions / banks for many years and it is a common practice for them to include "right to offset" language in your loan documents. I debited many an account for past due payments and/or fees if we were unsuccessful getting payment.

It would be worth looking for this clause in your documents to make sure you are protecting the money in your accounts. They will take whatever is available if you are late enough.

[magyar123]

Yes, I'll just chime in with more of the same. I've worked at credit unions / banks for many years and it is a common practice for them to include "right to offset" language in your loan documents. I debited many an account for past due payments and/or fees if we were unsuccessful getting payment.

It would be worth looking for this clause in your documents to make sure you are protecting the money in your accounts. They will take whatever is available if you are late enough.

A comment and a question concerning the above:
Comment: That right to offest language is probably in smaller print than that Chinese sounding legal mumbojumbo, probably only visible with a real strong magnifying glass.
Question: Does the "right to offset" by credit unions also apply to protected funds such as Social Security?