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steve24brown · Apr 1, 2011, 01:51 PM

JudyKayTee · Apr 1, 2011, 01:52 PM

Where? As a general rule, no. What kind of personal debt?

steve24brown · Apr 1, 2011, 01:55 PM

In Florida. I am an officer of a the corp. I had a personel account that was overdrawn with them, the setoff against my corp account,

JudyKayTee · Apr 1, 2011, 01:56 PM

The advantage of forming a legal corporation is protection from corporate debts - and the other way around. Was the bank aware that you are legally incorporated?

I thought you were talking about a creditor taking action against you. A bank moving from one account to another "may" be different. Banks are notorious for making up rules as they go along.

Let me check - if someone else gets here first, hopefully they will have an answer.

steve24brown · Apr 1, 2011, 01:59 PM

That was my understanding as well. I just can't find any written
Laws to back me up.

excon · Apr 1, 2011, 02:05 PM

Hello s:

Your corporation is NOT responsible for your personal debts. They are separate entities. If the bank took corporate money, I'd ask them to give it back or you'll sue them.

excon

steve24brown · Apr 1, 2011, 02:08 PM

That is what I am trying to accomplish. Just want to find a written statute or something to back me up before I take the next step

excon · Apr 1, 2011, 02:17 PM

Hello again, steve:

If the bank executive DOESN'T understand basic corporate LAW, then he's not going to believe you no MATTER what you bring him. Don't try to convince them. SUE THEM! Certainly the JUDGE knows the law.

excon

steve24brown · Apr 1, 2011, 02:22 PM

One more point. They are not telling me that their right to setoff overrides my protections of the corp. I will post the information they just sent me

steve24brown · Apr 1, 2011, 02:27 PM

I would love to SUE, but we don't have the money needed to get into a cout battle with them. I am looking into remedies with the Federal Reserve through a complaint. Any other suggestions would be appreciated.

AK lawyer · Apr 1, 2011, 02:38 PM

Originally Posted by JudyKayTee

The advantage of forming a legal corporation is protection from corporate debts - and the other way around. ...

Well, technically it's the other way around, but not the first way. In other words, the "corporate shield" limited liability principle protects the individual shareholder against debts of the corporation, but it doesn't protect the corporation against debts of the shareholder who owns the corporation.

In theory, a creditor can proceed against the assets of a corporation if the creditor is able to prove that the individual debtor owns the corporation. But it's not commonly done.

The bank cannot take the setoff on its own. Unless, of course, you, as an officer of the corporation, signed some sort of an agreement allowing them to do so. That's the first thing I would look for.

excon · Apr 1, 2011, 02:43 PM

Hello again, s:

Couple things. Small claims court is CHEAP, quick and easy. After reading the sig card (damn little letters, I might add, which is ON PURPOSE too), I find MANY issues where you may hang your hat...

Regarding setoff, in the very first sentence, they say... "We may (without prior notice and WHEN PERMITTED BY LAW), set off the funds....."

They are NOT permitted by law to steal from your corporation to pay a debt that you personally owe. There AIN'T no doubt about that. There's more in there too, that gives you relief. Sue the bastards.

excon

steve24brown · Apr 1, 2011, 03:11 PM

I have attached the only thing that was signed whaen the account was opened with regard to setoff. Please let me know what you think.

ScottGem · Apr 1, 2011, 03:11 PM

First, you state that this was corporate funds. But are you, in fact, incorporated? The signature card you attached appears to be for a normal personal account. If the account was a corporate, it would be in the corporation name and you would only be listed as an authorized signatory, not an owner of the funds. So that is the first thing you have to look at. The setoff clause is fairly standard. But it can only be used on accounts where there is an ownership interest.

Second, the main purpose of incorporating is to set up a legal entity that is separate from personal assets. All you need is a legal definition of incorporation to show the accounts should be kept separate.

But my guess here is that you have not incorporated. That the account was setup as maybe a DBA and therefore the bank was within its rights to exercise the setoff clause.

steve24brown · Apr 1, 2011, 03:42 PM

Yes we are incoporated. They even required the articles when we opened the account. All of my documents BCS, INC.

excon · Apr 1, 2011, 03:47 PM

Originally Posted by steve24brown

All of my documents BCS, INC.

Hello again, s:

From a legal perspective, BCS, Inc. and YOU are TWO different entities. They file TWO different tax returns. They share NOTHING. One's assets and liabilities are NOT the others assets and liabilities.

If the bank doesn't understand this BASIC premise in law, then take your money out of there, and sue them already.

excon

steve24brown · Apr 1, 2011, 03:49 PM

Sorry incorporated

ScottGem · Apr 1, 2011, 03:50 PM

Excon is right. If the owner of the account is BCS, Inc. then they have no right to setoff those funds for your personal debt. Unless you specifically signed something that gave them that right.

JudyKayTee · Apr 1, 2011, 04:03 PM

I think OP has to look at the documents he signed when he opened the account(s) at the Bank. He may have given some sort of authority to the Bank.

My late husband had a corporation. He was advised by his Attorney to maintain personal accounts in a separate bank. Maybe this is the reason -

And to "AK" - thanks for the correction.