Is it legal for a bank to put a hold and a "no post" on a business account for non-payment of a personal loan owed to the same bank? There is no court-ordered judgment. The hold has been removed and bank says "no post" was put on account accidentally. We were even told to have suppliers run checks back through, and then because of the no post, they bounced again. The bank wants their money, but are killing our business. Any advice greatly appreciated.
If the business is a sole proprietorship, the bank may be within its rights to attempt to take funds from that account to apply them against the defaulted personal loan. However, if the only thing in common is that the delinquent borrower is an authorized signer on a business account owned by an LLC, partnership or corporation, the bank has probably overstepped its authority in taking any action against the business account.
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If the business is a sole proprietorship, the bank may be within its rights to attempt to take funds from that account to apply them against the defaulted personal loan. However, if the only thing in common is that the delinquent borrower is an authorized signer on a business account owned by an LLC, partnership or corporation, the bank has probably overstepped its authority in taking any action against the business account.
