Legal Question in Credit and Debt Law in Illinois

banks

I had a checking account with a local bank that had overdraft protection on it. They all of the sudden closed my account this week and stated they were keeping my pay check that is direct deposited to help pay for the overdraft protection on the account. I have not been taken to court by them for non payment or anything they just have done this on there own. There were no communications from the bank stating this was going to happen. I would not have known about it if not for online banking. I checked my account one day it was there the next it was gone so I called the bank and that is when I found out what was going on. They waited till they could see my check being deposited before showing that the acount was closed. Is this legal for them to do or do I need to take them to court over the matter?


Asked on 1/08/09, 9:41 pm

1 Answer from Attorneys
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: banks

Yes, this is legal, as I'm sure it was probably provided for in the contract you signed to obtain the overdraft protection. Generally, if you owe money to a bank that you have deposits at, they have a right to offset the money you have deposited with them, to pay off the debt you owe them. If there is still a debt remaining after they apply it, they can still sue you for the remaining balance.

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Answered on 1/11/09, 6:23 pm


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