Case against bank for failing to explain large debit on account?

[phoenyx]

I am going to be filing personal bankruptcy soon and closing my S-Corporation. I'm completing all the accounting for the S-Corporation for its tax returns (and, in turn, mine.) I'm also going after any refunds that my S-Corporation might be able to get.

Specifically, my company's bank account wad debited on 05-17-2006 for about $5400 noted "GARNISHMENTS/TAX LEVY".

I never received correspondence from my company's bank regarding this levy.

In the past few weeks, I made a request in wriring to my company's bank for a copy of any correspondence that they should have sent my company regarding the levy. Or, if that was not possible, to be told what company or government body requested the levy.

I have just been told that the bank previously had two legal processing departments in different states. One legal processing department shut down and put all of its records into storage. The existing legal processing department has no idea where those records went, and for cases in the past has unsuccessfully tried locating them.

My bank has told me that they do not know if they will ever be able to provide me information on this debit.


Do I have a case against them? Don't they have to give me a detailed reason why they were allowed to take about $5400 out of the account? If they can't, shouldn't they consider it an error and give it back? It's about a year and a half ago, and I can't believe that a statue of limitations on keeping such legal records would have passed already.

[Minnymouth]

Check the records at the Courthouse showing who has judgements against you where someone has filed suit against you or a Govt. office has filed a tax levy on you... it should be on record there.

From the amount sounds like you failed to pay some government taxes on your business, either state or federal.

You do not say how long you have been in business or whether all your tax papers are current and turned in.

Have your done your personal taxes all the past years? Then done your S-corporation taxes separately also? Have you kept them separate?

Its a govt tax levy that they are taking so it has something to do with you not paying/or not paying enough state or federal tax....

Contact your local state tax office and research your account, then contact the Federal Income tax regarding your business and your personal affairs, and they can let you know which one is at default.

You may never get info from that bank..... especially if they closed a branch down....

Remember a garnishment is court ordered..... find out where the order came from - Federal or State and take it from there.

Is it the banks fault..... probably not, unless they took money out of your account for another business, or someone with the same name as yours.......

I had a terrible time with one bank..... my dad's name and mine were the same, especially the initials. I had to change banks in the end to keep it all straight... They would deposit his checks in my account, and mine in his...... a MESS....

Good luck, keep us posted.

PS If it is a posting error and it's not supposed to come out of your account...... then you have some recourse and the bank is at fault.....