Offset of a Corporate Account

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Question:

Does the bank have the right to offset a corporate account for a personal checking account debt?

Answer:

No. The right of offset is a function of state law and may be enhanced by contract terms. However, the concept requires that the borrower who owes the money and the accountholder whose funds will be taken be one and the same. You cannot take property from one person (the corporation) to pay on the indebtedness of another (the individual) unless the corporation has accepted the liability. That is not likely.

First published on BankersOnline.com 4/10/06