AboutChristine Janklow Expertise As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.
Experience My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses.
Organizations Turnaround Management Association; Los Angeles area
Publications Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."
Education/Credentials Bachelor of Business Administration; Associate of Arts Merchandising
Past/Present Clients American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers and service providers.
Question We have a business checking and also a joint personal checking account with Bank of America. Our business credit card payment was 90 days past due when we received a letter on April 22, 2008 advising us we had until April 29, 2008 to bring the account current. Bank of America then completely emptied both our business and personal accounts on April 23, 2008. We went to our local branch and spoke to the Branch Manager, who contacted the division responsible for draining our accounts. We spoke to the representative of that division ('Customer Assistance', I believe), April Salazar, who said Bank of America had been trying to reach us for "4 months". (Not true. We received one call in March from BofA regarding the past due payment, and we told the rep we were trying to bring the account current. He (didn't get a name) said fine, let us know if you need assistance, and ended the call.)
We received a letter from Bank of America dated April 24, 2008 informing us that both accounts had been emptied according to their right of offset policy and that we no longer had access to the funds, effective the date of the letter, April 24, 2008. The accounts were actually emptied the morning of April 23rd. Is this legal? We understand that we owe them money, and are making every effort to bring the account current, but can they send a letter stating that we have until April 29th to resolve the situation, and then completely empty both our business and our joint personal accounts April 23rd without any notice? I don’t if it’s relevant, but the business is a sole proprietorship and is only in my husband’s name.
Thank you
Answer Debra:
Thank you for your inquiry. I regret the situation you find yourselves in as it has no doubt caused great disruption and stress to you both. The series of events you describe is unfortunate, but within the confines of collections and quite common. The bank has a right to take back monies you owe them by attempting to collect the debt through a series of communications efforts. I believe now they have your attention. They are supposed to call you and write to you to inform you that you have defaulted on your obligations (fallen behind). If as you say, they did not follow that procedure, it would be hard to prove. Nonetheless, the damage is done. Most people think, well they can't touch my personal accounts, just my business if it is business related debt. Nothing could be more untrue. Most small business owners whether incorporated or not, fail to establish true business credit that would enable a business to attain its own credit without the need for the owners personal guarantee. Your husband clearly personally guaranteed the debt, and to compound the issue, he is a Sole P. If you live in a state such as California, which has community property laws, your husbands debts (and vice-versa) are shared. Getting back to why they took the money,it is simple they can because when he signed up for a bank account with them, he gave them the right by signing a signature card required to open the accounts. The language "permitting" right of offset is usually on that card (which hardly anyone reads or acknowledges). The issue is at this point, to make the bank work with you. You might argue that their taking all your money has caused you such extreme hardship it may force a bankruptcy and see if they will consider the account current and work it from there. Otherwise, you might want to open another checking account at a bank, where no debt is owed until you straighten this out. If you were struggling to make payments prior to this, this is not going to help you maintain the debt if your sole source of income is obstructed. Go directly to the bank manager and (if true) tell them you have been long term customers who never defaulted on debt and see if they are willing to work with you. If not, than I would strongly suggest looking into business debt settlement to get this account paid off at a discount. I wish you the best in resolving your situation. If you found this answer helpful please take a moment to write a positive comment and to rate the answer.
