Houston, TX asked in Consumer Law, Banking and Social Security for Texas

Q: Caught in a fraud scam my checking is overdrawn thousands. Can my bank take my social security in savings to pay that?

Both pension and social security go to savings but checking is overdrawn. Can they take that to pay off what is owed in checking?

2 Lawyer Answers
Teri A. Walter
Teri A. Walter
Answered
  • Consumer Law Lawyer
  • Houston, TX
  • Licensed in Texas

A: Probably, yes. The bank's account agreement probably gives them the right to offset what's due on one account with what's in another, even if the funds deposited there were exempt before they we deposited. You may want to contact them and work out some payout arrangement on the overdraft so that they don't take all the funds in the savings account.

Bruce Alexander Minnick agrees with this answer

Bruce Alexander Minnick
Bruce Alexander Minnick
Answered
  • Social Security Disability Lawyer
  • Tallahassee, FL

A: Social Security payments are exempt from most collection attempts--except banks trying to balance their books.

Look at it this way: Your large overdraft has already cost the bank a bunch of money; so why would you think they have to eat all the financial losses caused by you?

The law is clear: Highly regulated American banks are REQUIRED to offset all their losses caused by customers with all funds belonging to the customer--unless the customer and the bank can work out a different solution.

Example: Long ago--when I was a commercial bank operations officer in Miami--we often arranged short term loans for our BEST customers, just to be sure no ODs occurred; in fact most good customers had established approved lines of credit with the bank expressly for this purpose.

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