I'm relatively new to banking and was wondering if anyone could point me towards the laws regarding the right to offset accounts with negative balances. Thanks!

I sure would like to know the answer to this also. Thanks.

Usually special accounts that third parties have vested interests in, such as funds for a child, are not subject to setoff of unrelated debts, but I don't have a cite for you.

Garnishment setoff can be found at 735 ILCS 5/12-708 Click here and scroll down to §708

You can also search some of the forums here for other information.

Hope that helps.

does anyone know if it is legel for a bank to right to offset after a voulentary turn in of a vehicle before it has been sold at fair market value?

Jacob's Dad -

I understand about the child's account scenario, but if it's just a seperate account with a positive balance (even if it's a DBA), we would have a right to transfer funds to cover the negative balance, correct? From an IL state regulation standpoint?

Trout22, I think (and I'm not a lawyer, nor do I play one on TV ) that if you can show that the funds in the account belong to the person you are trying to ding, you'd probably be OK. Anything else, taking funds that don't belong to that person would be a no-no.