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Right To Offset Against Joint Accounts

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Question: 
Does a bank have the right to offset a delinquent personal loan using a joint account? The loan is in the name of just one of the joint account holders not both.
Answer: 

Aside from credit card debt, the right of offset is purely a matter of state law; the Maine answer might differ considerably from the Arizona answer. However, banks often attempt to clarify or expand their rights by inserting favorable language in their loan and deposit contracts.

Contract language giving the right to offset individual debts against joint deposits is common, but make certain the language exists in your documents and verify with your legal counsel that it does not conflict with state law.

First published on BankersOnline.com 3/11/02

First published on 03/11/2002

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