Should You Have Bank Accounts at the Bank You Owe Money To?

Florence Attorney B. Grant McNuttMost people have at least one bank they are loyal to and usually you will have multiple types of accounts with that bank.  I am sure that whatever bank you currently do business with offers you incentives and seemingly great deals to open other types of accounts with them.  The new account could be a credit card, car loan, a mortgage or home equity loan, or home equity line of credit.

This is a great opportunity for your bank to easily obtain more business from you since you are already a customer.  And, unless you dislike your bank it is very reasonable for you to take the bank up on the offer if you need that additional service.  You are probably thinking that you need that service anyway so why not use the bank that you already know and trust.

You can usually see all your accounts on one screen if you pull it up on their internet banking site and take care of your payments easier and more efficiently.  That is exactly what your bank wants you to think and feel.

If everything in your life is going great there would be no issues with having multiple bank accounts, a credit card, car loan or a mortgage and line of credit with the same bank.

Owing Debts to a Bank

But what happens once you have a financial setback?  What happens if you are unable to continue paying on one or more of the debts owed to the bank?

At this point you should highly consider speaking with one of our Bankruptcy lawyers to assess your situation.  At Bond & Botes, our affiliated offices offer free initial consultations.

The quick and easy answer to the initial question of “Should I have bank accounts at the same bank I owe money to” is “No”.  There are exceptions and at Bond & Botes we will discuss those with you.

But there are several questions you need to ask yourself if you do have bank accounts where you have other loans or credit cards and the financial setback occurs and some are as follows:

Are your credit cards cross collateralized with your vehicle loan?  If so, then you may not get your title to your vehicle unless you also pay the credit card debt in full as well.

If you are unable to make your credit card payments for a period of time, guess what? Under certain circumstances a bank can take the money you owe them from your checking or savings bank accounts.  How can the banks do this, you ask?  This process is called a “setoff” and in most situations you gave them permission to do this when you signed up for the extra credit card, car loan or home mortgage.  You might say to yourself, I did not agree to let them do that, but it is usually in the fine print of the terms and conditions portion of the documents.  They unfortunately do not point this out to you in most instances and since you trust “your” bank so well, you probably never read the document close enough to know you had given them permission to do this.

On the other hand if you have a credit card with a bank that you do not have a bank account with, the bank would need to sue you first and obtain a judgment against you before they can levy or garnish funds from your bank account.

If you have a bank account at the same bank as your credit card this is not necessary and they can just they can just take it from your bank account.   What can make matters worse is if you just wrote a check to pay a bill not knowing that the bank had already taken some money out of the bank account and then your check bounces.

Then you would then be hit with a Non Sufficient Funds (NSF) fee by the bank and possible criminal issues from the entity you wrote the check to.

Most of my clients have the same response when I advise them of this practice and it is to the tune of “Oh, my bank will never do that to me! I’ve been a loyal customer for 15 years!”  Well, at Bond and Botes we have filed thousands of bankruptcies and we can assure you that banks are not people and as such they do not have feelings.  They do not care if you have been a customer for 1 year or 10 years.  Banks are in the business to make money, so the bottom line is do not have bank accounts at the same bank where you owe money.

At Bond & Botes, our affiliated offices offer free initial consultations.  Please feel free to call one of our conveniently located offices to set up a private consultation with one of our experienced attorneys.  We will analyze your situation and help you to make the best decision possible to help you eliminate that your debt once and for all and protect your hard earned assets.

 

Related Information

Share This Page

Bond & Botes Law Offices

At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call 1-877-581-3396 or click here to setup your free phone or video consultation.

The lawyers at the Bond & Botes affiliated offices serve clients at offices in Anniston, Birmingham, Mobile, Montgomery, Opelika, Decatur, Huntsville, Florence, Haleyville and Gadsden, Alabama; Vicksburg, Hattiesburg and Jackson, Mississippi. Read our disclaimer here. You can view our Privacy Policy here.

Alabama Offices

Birmingham

2107 5th Avenue North
Age-Herald Building
Birmingham, Alabama 35203
Phone: (205) 802-2200


Shelby County Location
15 Southlake Lane, Ste 140
Birmingham, AL 35244
Phone: (205) 802-2200


Florence Location
121 S. Court Street
Florence, AL 35630
Phone: (256) 760-1010


Huntsville Location
225 Pratt Avenue NE
Huntsville, AL 35801
Phone: (256) 539-9899


Montgomery Location
311 Catoma Street
Montgomery, AL 36104
Phone: (334) 264-3363


Decatur Location
605 Bank Street
Decatur, AL 35601
Phone: (256) 355-2447


Haleyville Location
914 19th St.
Haleyville, AL 35565
Phone: (205) 486-3580


Gadsden Location
430-B Chestnut Street
Gadsden, AL 35901
Phone: (256) 485-0195


Opelika Location
216 South 8th Street
Opelika 36801
Phone: (334) 887-7666


Anniston Location
1302 Noble St #2C
Anniston, AL 36201
Phone: (256) 344-3559


Cullman Location
200 Second Avenue SW
Cullman, AL 35055
Phone: (256) 739-9866


Mississippi Offices

Jackson Location
5760 I-55 North, Ste 100
Jackson, MS 39211
Phone: (601) 353-5000


Hattiesburg Location
607 Corinne St, Ste B8
Hattiesburg, MS 39401
Phone: (601) 264-7200


Vicksburg Location
1212 Farmer Street
Vicksburg, MS 39180
Phone: (601) 353-5000

© 2024 by Bond & Botes Law Offices. All rights reserved. Disclaimer | Privacy Policy