Legal Question in Credit and Debt Law in California

Money applied to a loan in default

Our business has a loan that is in default with a local bank. We closed our accounts there in December. Last month our credit card processor directed a payment to the old account and the bank took it as payment toward one of the loans with no notification to us. Now we can't pay for the material purchased for that customer. I guess I am just wondering if that is legal even if the bank account was closed?


Asked on 4/18/08, 8:05 pm

1 Answer from Attorneys
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: Money applied to a loan in default

Read The Friendly Contract(s) (the one(s) you signed when you opened your bank accounts). Probably the small print says you agreed to let the bank take the money.

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Answered on 4/18/08, 10:14 pm


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