The practice of taking money from a bank account to pay a debt owed to the bank is called "setoff". While many loan agreements may provide for a set off of funds, the Fair Credit Billing Act (FCBA) prohibits a bank that issued a credit card from removing funds out of a deposit account to satisfy its credit card claims. This prohibition is very broad and contains only minimal exceptions. For example, the bank is prevented from exercising set off after the termination of the credit card, unless the debtor has incurred additional debt after termination of the card. The law also prevents financial institutions from taking money the consumer intends to deposit, before it is formally deposited. For more information on setoff, read our article.
f you have a bank account and a credit card issued by the same bank in Virginia, you need to review your agreement and make sure that you have not authorized the bank to take funds out of your account to pay your credit card debt. If you are struggling to pay your credit cards, it may be time to file a Chapter 7 or Chapter 13 bankruptcy. Contact Hampton Roads Legal Services today at 757-320-2010 to schedule free consultation to see if bankruptcy will help you.