Bank of America unfair, cruel and counterproductive loan recovery atlanta, Georgia

it's not just if your behind on a loan. It's for any debt that is owed to the bank. For example, if you have an account with your spouse, friend, parent, etc and an account in just your name; if the joint account goes into the negative and there's money in the single account then the bank can/will use Right of Offset to recover the amount owed them. If this happens to be the entire balance of your account it'll be gone and not returned. As stated: if you owe a bank for any reason don't open an account there and expect them not to recover their money.

For future reference when you open your bank account you are given the terms and conditions and buried in the fine print is a little known provision called "The Right of Set Off". What that means is if you default on a loan with the same bank all deposit accounts can be used to "offset" the loss by the bank without notice to you. That little booklet given at the time you opened the account is considered notice so they did not have to tell you in advance they were taking the funds. They told you already that your funds were subject to set off when you opened the account.

Credit Unions refer to this same thing as "cross collateralization" and its a bit more broad but the same exact concept.

The fact that you signed on a loan and then defaulted on it 4 yrs ago (even if someone else was the primary borrower) gives BOA the right to take all of your funds to offset that loss under the Right of Set Off described in your T&C's when you opened the account. That reason alone is an excellent reason to not co-sign a loan with anyone for any reason unless you are the one making each and every payment on the loan so you know if the loan is in good standing or not.

To protect yourself in the future: don't open any accounts in banks where you have an outstanding default on a loan. CLOSE YOUR BOA ACCOUNT. Open new a new account at a local credit union or another regional bank. 

Another way to protect yourself is to have an emergency fund set aside in another completely separate bank/credit union. Make sure you don't owe anything to that bank or CU either or you will face the same issue. So you will have at least two accounts in two separate institutions, one as your emergency fund and the other as your regular account where you pay bills etc. Once you have emergency funds set aside, you will feel more in control of your life.

Just a little comment, this is a business transaction and has nothing to do with the bank being "morally justified" in taking the money. You gave BOA permission to take the money when you opened your account with them. Don't let any bank grab you by surprise anymore. Learn about what they can do or not do so you can protect yourself.

Jim,

The SOL prevents a law suit but doesn't prevent the right to recovery.

That fact makes this "Withdrawal" THEFT
Go to Budd Hibbs website and read what the LAW says, they can go to jail over this THEFT.
Then after your'e clear on the LAW get a good lawyer. (They'll have to pay His bill too)

I will preach "common sense" one more time.

WHY would you even think about putting money in a bank that you defaulted on a loan with?

There is an "offset" provision in your terms and conditions for that bank account. This means that you agreed to let the bank take money to pay any other obligation that is outstanding with that same bank. This also applies to joint accounts and accounts that you are listed as an authorized user on.

They don't have to notify you.
They don't have to leave you any money to eat on or to pay rent.
They did not break any laws.

And, if you put more money in that account, they will most likely take that too!

My advice to you is to close that account immediately and stop any direct deposits you may have that go into it. Do this right away!!

Open another account at a bank not in any way affiliated with Bank of America.