Right of Offset = reverse loan payment???

[justasking]

Hello All,

I have a basic question that I would LOVE if this group could help me find a legal case / law in MN to deal with our bank.

Question:

Does the bank's so-called "Right of Offset" allow them to reverse a loan payment?

I say it does not. Particularly when funds were in account for eight days prior to loan payment and they did nothing. Then four days after loan payment, they reversed the payment and applied it to another loan.

I am really irritated with this bank and would love to have some legal standings to use against them.

Any and all help with this info (again state is MN) is very much appreciated!!!

[justasking]

OK so no responses yet.

Here's another question then ... does anyone know of any online legal databases where I can search for this issue myself?

IANAL (I am not a lawyer) so I would not even know where to start ... and of course, I'd need a free access.

If anyone has any ideas, I'd appreciate them. Thank you.

[mtngirl47]

A quick google of "right of offset" will give you lots of free pages that might answer your question.

Open a new bank account today. Put your money in a bank where you don't owe any money. The bank will always try to get theirs first.

[justasking]

Thank you, I'll do some research this weekend.

Oh, we moved out of this account in January. This was a loan payment in Feb and I stopped paying all three loans after they wouldn't move the funds back to the correct loan column.

So trust me, they are not getting any more funds. It is just that if they are going to move every payment over to the first loan to default (the LOC), they'll never let me pay the SBA guaranty loan off in full. As such, we've refused to make any more payments on anything because they won't offer us any written guarantees that any future payments will stay on the SBA loan.

The loan value is such that I do not think they will bother with the SBA guarantee (although I am not sure if NOT involving the SBA is an option -- they may have a fiduciary requirement to notify them) but it is the only loan with the mortgage attached.

No response yet on our settlement offer. We are prepared for the Chapter 11 if they won't accept. If we move to that, we will argue this loan reversal was a preferential transfer and go from there. <sigh>