Debts In Bankruptcy
May 30th, 2011
People frequently bank at the same bank where they borrow, either personally or for their business. When they are thinking about Bankruptcy, this is dangerous. Banks or other creditors have the right to set-off debts they have against you against money you have on deposit at their bank. This means that the bank can take money out of your account and apply it to your debt with that bank. They really can do that. And they don’t need to file a lawsuit against you either. It can happen overnight when you are not even looking.
When you are a happy customer and the bank is a happy bank, this is not going to happen. But when your business is in trouble, your bank might not be so happy with you, especially if you personally guaranteed your debt to the bank.
Entry Filed under: Finance