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Can I Keep My Bank Account in Bankruptcy?
08/20/2007If you have a loan with your bank and are wiping it out through your bankruptcy, did you know that they may help themselves to the money in your account if you do not continue to pay your loan with them?
The right to "set off" is usually imbedded in your original contract with the bank and it allows them to apply the money in your checking account to your debt with the bank.
A creditor with a right of "set off" does not need to sue you or give you notice to take the money from your account.
If the situation above applies to you, and you are doing a bankruptcy, switch to another bank and then call your payroll department to have them re-route your direct deposit into your new bank account.
Source: Dean D. Paolucci, Attorney at Law
