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"Right of Offset" On Business Acct. (Credit Union)

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Question: 
Can the Credit Union exercise their "Right of Offset" on a business account to pay a delinquent personal loan where the principal owner is listed as a signer?
Answer: 

Any "right of offset" held by a financial institution is governed by:
*state statutes,
*state court decisions, and
*contract terms.

There is no universal answer; research and reading are required.

Regardless, the bedrock principle is that the depositor and the debtor must be the same person. If Fred owes you money that does not give you the right to take funds from an entity's account even if he is the sole owner of the entity.

First published on 06/24/2018

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