Business Debt/Right of Offset

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Expert: - 1/7/2010


Question
Hi,

I have two sets of accounts that I have opened with Bank of America previously.

Firstly, I have my personal accounts including a checking, savings and maximizer.

Secondly, I have a business checking account which I opened for a C Corporation (State of CA).  When opening this business account, I used the Tax ID of the corporation and absolutely did not sign up as a personal guarantor.  

Recently, the business checking account was overdrawn due to a charge Bank of America processed.  This transaction should have never taken place but that is another story.  Long story short, Bank of America recently withdrew money from my personal account and deposited it into the business checking account without my permission.  When I called to see what happened, they claim that they are exercising their "Right to Offset".  I've done some extensive reading on this right and I still do not see how it is legal for BOFA to take money from a completely unrelated personal account and transfer it into a business checking account, owned by a California Corporation.  It is my understanding that this is exactly why C Corps were created -- to protect its members and shareholders.

In summary, I feel as if BOFA has just stolen my personal money.  Am I missing something?  If not, how should I proceed?  Should I simply write to BOFA's resolution services department to recoup the money?  Can I sue for personal damages?

Thank you very much for any help you can provide here.

Answer
Erik:
Thank you for your question, sounds as if a banking error has occurred. Normally unless you have an agreement that allows accounts to be co-mingled i.e. a Sole P and personal checking under one suite, that should not have happened. I highly suggest you contact the resolution department and place a dispute to recoup monies and have the matter investigated. They should issue you a short term credit until the matter can be clarified. As for suit, seek advice of attorney but only after all efforts to resolve have  been exhausted and or not achieved a satisfactory resolution.

Respectfully,

Christine Janklow

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Christine 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. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Organizations
Provisors;Turnaround Management Association; Los Angeles area

Publications
Accounting Today; Web CPA; National Restauarant Association;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, food service industry and other small businesses and service providers.

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