|
 |
Home >> My Bank Said ...
Offset for Old Debt: Legal?
In 2007, I had a joint account that was closed and a balance remained, due to the bank. I completely forgot about the debt and opened an account in my name only, and now I am being charged for the overdraft fees. I understand they are owed and I am not disputing that. Does the bank have authorizaton to take the total amount and leave me with a negative balance? When I asked to speak with a manager, I was told that they had answered all my questions and would not forward the call to a manager. I tried to resolve this with several different departments, to no avail.
|
|
 If under state law, the old charged-off account is still an enforceable obligation (most statutes of limitations for such things are longer than three years), and if under state law and/or your deposit contract for the new account, the bank had a right to set off what it owed you against what you owed them, the bank's actions are probably legitimate. Normally, no more than the current balance in the new account would be transferred.
State laws vary widely concerning set-off (sometimes referred to as offset) rights. Some prohibit it, others require advance or contemporary notice, others are silent.
As for not being able to reach a manager, that should not have happened. Call back and try to reach a manager with the idea that you'd like to work out a short repayment program rather that having all your funds taken at once.
Published on BankingQuestions.com 11/03/10
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
