What is a Bank Set Off?

bank set offWhen can a bank take your money from you? That is an important question to ask, especially if you are at the point when bankruptcy can seem like a very real option. While in some cases it’s entirely legal – and very possible – for a bank to remove money from your account, it’s also a process that’s very heavily regulated. One of the topics you might want to cover in your next discussion with a Brooklyn bankruptcy attorney is the possibility of a bank setoff.

A bank setoff is the legal term for a process by which a bank takes money out of your deposit account in order to pay a fee that you owe to that bank. The simplest type of setoff is one that most people know as an overdraft charge. In other cases, though, a bank may be able to remove money from your account in order to cover a loan payment that you’ve missed. This can be problematic, especially if you’re intending to use that money for something else.

A bank cannot simply use a setoff whenever it feels like it, though. You typically have to authorize the bank to be able to do a setoff for a late credit card payment, for example, and in many cases a bank can’t take money from certain types of income (SSI, etc) in order to do a setoff. In these cases, you will need to show that the bank’s actions violated the law.

Call a Brooklyn Bankruptcy Attorney

If you’re having trouble with bank setoffs, it’s usually a very good idea to contact an attorney. Working with a Brooklyn bankruptcy lawyer might be the first step to helping you to get past these incidents and move on with your bankruptcy process. Remember, there are cases in which a bank may use a setoff to recoup funds, but you still have a right to be protected from unlawful setoffs. If you’re working towards getting your financial footing, you deserve to have all of the protections of the law. Contact us today!


Ursulova Law offices, P.C.

Contact Ursulova Law Offices, P.C. to find out how our NY Bankruptcy Attorneys can help you today. Our offices are located in New York, Brighton Beach, Brooklyn and Garden City.


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