When can a bank seize funds from a checking or savings account for money owed on the bank's credit card in Texas and do they have to first give notice of their intent to do so?

Answer

The majority of banks who issue credit cards and loans to consumer's who also have accounts at the institution include a "set off" clause in the terms of the lending agreement.

Such a stipulation allows the bank to withdraw whatever amount is owed from the debtor's account(s) without notice or court procedures when the lending agreement is defaulted. A defaulted account is defined in the terms of the lending agreement, generally it is missed or late payments, NSF checks rendered for payment, and so forth. Such lending agreements will often contain accelerated payment clauses meaning the entire balance can become due upon default and the bank can withdraw all funds necessary from the debtor's account to cover the monies owed.

In most instances a set off action could apply to joint marital accounts as Texas is a community property state.

First answer by Macky. Last edit by Macky. Contributor trust: 3288 [recommend contributor]. Question popularity: 16 [recommend question]