Can a bank do this?

[sacain]

I own a LLC in Alabama, my personal and business accounts are all at the same bank. My wife also has a personal account at this bank. Her employer has wrote her several bad checks which the bank has. We have requested for the bank to turn these checks over to us so we can turn them over to the District Attorneys office. The bank refuses to turn them over until my wifes account is made current. Her account can't be made current until we collect on these checks. Yesterday, I found out that the bank liquidated my personal account and business account without my knowledge and closed the accounts down. When I called the bank to find out about they said the President of the bank authorized it. I requested for him to call me back and has yet to do it. The bank says because my wife is associated with me and the accounts they can do this. My questions are can they legally do this, my personal account I can maybe understand but my business account since it is it's own living breathing entity can they take the money and close down the account. Keep in mind my personal and my business account were both in positive numbers and have never been in the negative?

 

[kaydee427]

I can't believe there was no reply you. I don't know the answer either but very interested in finding out. I thought business accounts (if they are separate entities, not sole prop.) were not able to be levied. Perhaps that is just for debt collection/judgements?

 

[Veronica1228]

I can't believe there was no reply you. I don't know the answer either but very interested in finding out. I thought business accounts (if they are separate entities, not sole prop.) were not able to be levied. Perhaps that is just for debt collection/judgements?

Actually, I would have anwered him if he had posted in the Banking and Credit Card forum, but I didn't even know about this thread.

To the OP, if you happen to come back and still have this issue let me know. Based on what you have posted so far I would say that the bank is in the wrong to exercise their right to set off against your business account, but I need more info before I can say for sure.

I have subscribed to this thread, so if you respond to it, I will be alerted and will answer your questions. No need to PM me or create a new thread. Thanks.

 

[Castigator]

AFAIK, or have ever seen, in MA they can't unless she is a joint holder of the account(s), or there was a suit and judgment against both of you jointly and severally (and even then a $500 must be left in the account). Did she have overdraft protection? Did you co-sign on that line of credit? How did her account fall short? Did the bank cash the checks then issue monies (procedural roblem at the bank)?

Probably should contact your AG and your state Banking commission (if you have one).

 

[Veronica1228]

AFAIK, or have ever seen, in MA they can't unless she is a joint holder of the account(s), or there was a suit and judgment against both of you jointly and severally (and even then a $500 must be left in the account). Did she have overdraft protection? Did you co-sign on that line of credit? How did her account fall short? Did the bank cash the checks then issue monies (procedural roblem at the bank)?

Probably should contact your AG and your state Banking commission (if you have one).

Wrong, wrong, wrong. Do not talk of things you do not know. Besides, the OP has not come back, so at least he will not suffer from your misinformation.

 

[Castigator]

Wrong, wrong, wrong. Do not talk of things you do not know. Besides, the OP has not come back, so at least he will not suffer from your misinformation.

What exactly is 'wrong,wrong,wrong?' My answer was 'they can't' unless (and you'll note, he never mentioned if there was/was not any court action against his wife)...

Since I draft ex parte motions for bank account attatchments every week and partially deal in collections, I have a fairly good idea how it happens here (which is why I mentioned 'here in MA', to put my answer within a certain context).

IF there was a judgment jointly and severally, they can motion the court to attatch his accounts. Not the LLC, unless she happened to be a joint holder of that account, in which case both the LLC and the joint holder of the account are bound by the contract language of the account...oh never mind.

Why not look at my response contextually instead of jumping all over it... unless you are saying you are wrong as well since the general responses were both a general 'no they can not'. (ie. we had the SAME general answer in case you missed it).

 

[Veronica1228]

What exactly is 'wrong,wrong,wrong?' My answer was 'they can't' unless (and you'll note, he never mentioned if there was/was not any court action against his wife)...

Since I draft ex parte motions for bank account attatchments every week and partially deal in collections, I have a fairly good idea how it happens here (which is why I mentioned 'here in MA', to put my answer within a certain context).

IF there was a judgment jointly and severally, they can motion the court to attatch his accounts. Not the LLC, unless she happened to be a joint holder of that account, in which case both the LLC and the joint holder of the account are bound by the contract language of the account...oh never mind.

Why not look at my response contextually instead of jumping all over it... unless you are saying you are wrong as well since the general responses were both a general 'no they can not'. (ie. we had the SAME general answer in case you missed it).

The reason that I said wrong is because this is CLEARLY not a judgement issue. It is a "right to set off" issue. So you are starting off wrong. In any event it doesn't matter because I doubt the OP is coming back.

 

[Castigator]

The reason that I said wrong is because this is CLEARLY not a judgement issue. It is a "right to set off" issue. So you are starting off wrong. In any event it doesn't matter because I doubt the OP is coming back.

lol. So you've had the luxury of all your clients telling you the entirety of a story? You've never had one 'forget something' or 'sorry I left that out'?

 

[Veronica1228]

lol. So you've had the luxury of all your clients telling you the entirety of a story? You've never had one 'forget something' or 'sorry I left that out'?

We'll probably never know who's right or wrong because the OP is most likely not coming back to clarify the issue. This is why I refrained from offering any real advice because we do not yet know what we are advising on. I've been on this board for a while now, and I don't play guessing games with OPs. It's a waste of energy and possibly negligent.

 

[fivewires]

shame

One of the problems that you should be aware of is that the bank, when they closed your account most likley reported you and your wife to Chexsystems.
by being on Checxsystems you will not be able to open a bank account anywhere. unless you convence the bank that they are wrong and get them to remove you from chexsystem you are perty much screwed for the next five years as far getting a checking account for your business or to use for personal use.

That's what happened to me, someone gave me a bad check and the bank didn't even let me know for over a month and reported me to chexsystems
now I cant open a bank account to run my business.

 

[Veronica1228]

Why do people keep digging up this old thread when the OP has not been back in over 3 and a half months??? Let it die already!!!