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NEVER BANK WHERE YOU BORROW!!
Ladies and Gents:
It is common for a bank to sweep accounts when the client has a business credit line. They are different than personal credit card accounts and often contain a clause which makes all accounts at the bank collateral for the business line.
You don't run into this with most mom and pop cases, but they are common in business cases.
dennis
wrote:
The post was migrated from Yahoo.
My advice to clients, every time - NEVER BANK WHERE YOU BORROW!! I had a client who reduced their account balances and even though they were current on payments to line of credit, Wells Fargo Bank swept the account and reduced the line.
>
> Wow, thanks for the replies David and Jim in particular. I've been at this over 15 years now and have never had B of A or any other bank do this to one of my clients. Credit Unions, yes. Banks, this is a first. I guess my momma was right when she said you learn something new every day. I count myself and my clients lucky, they had less than $600 in the accounts total.
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> Jeff Smith
>
> --- In cdcbaa@yahoogroups.com, "jbsesq1965" wrote:
> >
> > I just got a call from a distressed client who had several open B of A credit lines, both business and personal, totalling about $85K in debt. > >
> > The client is about 90 days past due on these accounts and was telling the collections dept to call me to verify an imminent Chapter 7, which is true, and we did verify representation to BofA collectors at least twice in the last 30 days.
> >
> > B of A just withdrew every dime of my client's money from a business checking account and a personal joint H & W checking account. There is no judgment in favor of B of A as the accounts are not even 120 days past due.
> >
> > That's new!
> >
> > I am going to start advising ALL clients to open new bank accounts at a bank that they do not owe money to, NOT Wells Fargo, and NOT Union Bank (based on last week's posts about post-petition freezing) as soon as they are delinquent on any account, or retain me.
> >
> > Does anyone know what B of A's authority to off-set is? I am guessing its in the credit card or loan docs but since this is a first for my clients, i'd like to know if this is happening to anyone else and warn those who might be unaware.
> >
> > Jeff Smith
> >
>
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