Can a bank take money from personal account to cover business account?

[justsomeguy]

What is the name of your state (only U.S. law)? CA

I have a business account for a C corp I set up, and my personal account at a local credit union. The business was a C Corp. It folded and there is a negative amount in the business account.

I was the one that originally set up the corporate account so they can usually pull it up by my social even though it was created with the corporate ID.

Should I move my personal account to another bank? Is there any way the bank could try and seize funds from my personal account to pay my business account?

 

[LdiJ]

What is the name of your state (only U.S. law)? CA

I have a business account for a C corp I set up, and my personal account at a local credit union. The business was a C Corp. It folded and there is a negative amount in the business account.

I was the one that originally set up the corporate account so they can usually pull it up by my social even though it was created with the corporate ID.

Should I move my personal account to another bank? Is there any way the bank could try and seize funds from my personal account to pay my business account?

We cannot answer that question. It all depends on the contract between you and the credit union when the corporate account was set up. Normally, when you are talking about a C-corp it would not be possible for a bank to seize funds from an individual account for a C-corp account but credit unions often have different contractual arrangements than regular banks.

Personally...if I were in your shoes I would move my personal funds...just to be safe. That doesn't mean that you could not ultimately be held responsible for the shortage in the C-corp account, again depending on contractual arrangements, but it would give you a greater measure of control.

 

[Jeran]

We cannot answer that question. It all depends on the contract between you and the credit union when the corporate account was set up. Normally, when you are talking about a C-corp it would not be possible for a bank to seize funds from an individual account for a C-corp account but credit unions often have different contractual arrangements than regular banks.

Personally...if I were in your shoes I would move my personal funds...just to be safe. That doesn't mean that you could not ultimately be held responsible for the shortage in the C-corp account, again depending on contractual arrangements, but it would give you a greater measure of control.

Yes, I agree.

Credit unions around here have been known to seize funds in personal accounts to pay any past due amounts owed to them. For example, if a person had a checking account at a credit union and a credit card through that same credit union, and the balance became seriously past due, they have been known to seize the funds in the checking account to pay the credit card bill.

 

[Zigner]

Yes, I agree.

Credit unions around here have been known to seize funds in personal accounts to pay any past due amounts owed to them. For example, if a person had a checking account at a credit union and a credit card through that same credit union, and the balance became seriously past due, they have been known to seize the funds in the checking account to pay the credit card bill.

Apples vs. oranges - please re-read the thread.