Can a bank basically bankrupt a business with a setoff
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Can a bank basically bankrupt a business with a setoff
Wells Fargo bank did a setoff of my LLC
business checking to satisfy a business
credit card debt. They cleared out all
of the money and now my wife and I ,the
only employees, have no money to pay the
mortgage, or keep our lights or phones
on and now have no funds to cover the
portion of the money that was from
customer deposits for installation jobs.
Is there any legal recourse to obtain
back at least a portion of those funds
so we can avoid being homeless and
bankrupting our business that is our
only means of paying our bills.
Asked on February 15, 2018 under Business Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If your loan, credit card, bank account, or other agreement with the bank gave them the right to do this, they could: if you signed any agreement giving them this authority, you agreed contractually that they could do this. If they had the legal right to do this, they could, regardless of its affect on you: they do not need to consider the effect on you of enforcing their rights. All you can do is double check all agreements you have with the bank, to see if they do or not have this authority; if they do not--if there is agreement letting them do this--then you can challenge it via suing them for the money: you would be suing for the return of money the bank had no right to take.
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