Our office often receives calls from potential clients who are caught by surprise when a savings or checking account is frozen and the funds are unable to be accessed as a result of a creditor's collection efforts. As a West Palm Beach bankruptcy attorney and lawyer I am often contacted to assist these potential clients to regain control over their accounts.
Most people do not realize that many financial institutions have a right of "setoff" concerning funds in accounts held by that institution if the debtor or potential client has a credit card account, credit line, or other debt held by the institution. If the debt is delinquent the financial institution may be able to seize funds in these accounts to satisfy the debt. Many documents that are required to open a checking or savings account with financial institutions provide for this right of "setoff". People are often caught off guard because the financial institution has not filed a formal lawsuit to collect the delinquent balance prior to seizing the funds as is required in order for a bank account to be garnished by a creditor where that creditor is not also the financial institution used by the potential client.
For example, if a potential client has a bank account with Wachovia and is delinquent on a credit card account with Bank of America, Wachovia does not have the right or ability to obtain funds in the accounts prior to obtaining a judgment in a formal lawsuit. However, if a potential client has a bank account with Wachovia and is also delinquent on a credit card or other account with Wachovia, Wachovia may have a right of "setoff" and can obtain funds without ever filing a formal lawsuit and obtaining a judgment. Potential clients often find out about the creditor's actions when attempting to withdraw money or pay bills online. Obviously, if a paycheck is deposited into this account or this account is the sole account for the individual many problems will result. This is often when the potential client needs an urgent consultation with a West Palm Beach bankruptcy attorney and lawyer.
If you have delinquent accounts with financial institutions that also hold your checking or savings accounts this is a recipe for disaster in many cases. If a potential client finds themselves in this position prior to filing bankruptcy it is usually in the best interest of this person or family to open a new bank account in a different institution. Creditors may still file a formal lawsuit to collect the balance but at least there will be notice of any potential judgment prior to funds being seized.
This is one of many situations where individuals and families suffering from the burden of excessive debt and delinquent on accounts should contact a West Palm Beach bankruptcy attorney and lawyer and discuss debt relief options including chapter 7 bankruptcies and chapter 13 bankruptcies as well as asset protection and debt settlement. Often not being proactive and seeking an attorney's guidance after a crisis has happened results in the loss of valuable legal rights. A bankruptcy filing will often stop garnishments and setoffs.
Contact the attorneys and lawyers of Tiller Law. Our bankruptcy attorneys handle bankruptcy matters throughout the state of Florida and have satellite offices in Fort Lauderdale, Boca Raton, West Palm Beach, Palm Beach Gardens, and Stuart, Florida. Call today for your free consultation.