Posted on 05/03/2010 5:12:21 PM PDT by Kartographer
When Hope and Matt Hughes stopped for supplies at a pet store last month, they thought the trouble with their debit card was just a glitch. But it turned into a financial crisis.
They quickly discovered that their bank, Wachovia-turned-Wells Fargo, had deducted $4,059.82 from their checking account, wiping it out.
It was no glitch. It is called the right of setoff or offset, a long-accepted practice dating to early English common law.
(Excerpt) Read more at ajc.com ...
I’ve executed offset - as a last resort - many, many times. Probably 98% of the time it was a pleasure because the debtor was such a jerk.
Wait till Obama care kicks in-it wont be the bank withdrawling money it will be the IRS
Sounds like the bank did make a serious mistake but I sure would want to know more about those other loans before I pass judgement on this one.
It is quite possible they had gotten in over their heads through poor judgement.
Note to idiots in article: remember to pay off your loans... or if you do not plan to pay, move your money out of the bank that you owe money to.
what happen to them had to suck.
Just remember, whoever controls your money controls you.
Well, this is kind of a “he said, she said” thing. But it sounds as if they took their account because they ignored all requests to repay a student loan. And it also sounds as if there was plenty of warning.
I guess there is one moral to the story. If you’re planning to fink out on your debts, don’t do it in a bank where you also have funds deposited.
It wasn’t so “sudden.” If I read the article correctly, the wife thought she had six months from her graduation to pay off. It’s been a year. And didn’t she notice some months ago that the bank was deducting a certain amount of money from her account? Why didn’t she or her husband contact the bank and work something out?
Sorry, but the story sounds fishy. I’ve heard of set-offs and they are a legitimate practice. Simply put, don’t pay off your obligation (or work something out with the lender) the lender has a way to get its money back. Otherwise, if the lender can’t recoup the money owed from too many consumers, it’s going to go under.
Look for the Obama administration to forbid setoffs and force banks and other lenders into bankruptcy.
Proving once again that there are consequences for the choices one makes.
You mean if someone owes me 10 and I have 5 of theirs , I can keep the 5 ? Shocking .
Sounds to me like they brought the misfortune upon themselves.
"...Now, the couple, who rely on Matt Hughes’ once-a-month paycheck from Kimberly-Clark, have had to sell possessions on Craigslist, tap into his 401K and negotiate with creditors so they don’t put their house and car loans in danger..."
I don't want to jump too hard on them, because I don't know the details of their lives, but...she took out a loan, with terms and conditions. She just graduated, they have a house, at least two cars, possessions and he has a 401K.
I don't want to put TOO fine a point on it, but don't people normally live in an apartment coming out of school, drive beaters and so on until they get on their feet and get a nest egg?
These people don't sound like they should have been able to buy a house. That sounds like one of the reasons we are in the state we are in.
bookmark
I’m not a big fan of banks but I recently had Chase forgive $10,000 on a credit card where my wife owed 13,000.
My wife had to quit her job suddenly because of Hepatitis C and was unable to pay the $500+ per month due on the card.
It was not easy and it took nearly a years worth of paperwork to accomplish it but they shaved the 10 grand off the total.
You read correctly.
“why did they think that they could fall behind on these obligations and the bank not take action?”
Because they believe they are entitled to whatever they want without consequences
It sounds like they made the student loans their very, VERY last priority to the point of not even paying them anything at all. I wonder how much of that attitude was due to seeing other people simply not pay their student loans back, and nobody ever came after them.
I understand the provisions in the healthcare legislation for student loans had the proviso that you could pay back the loans at 10% of your DISPOSABLE income each month, and after twenty years, the rest would be forgiven.
Boy, if that is true, such a deal. Take out $200K to go to Harvard, and pay back...what? What if I only have $10 of “disposable income” each month...sounds like free government pie to me.
Anyone else remember seeing that tidbit in there?
Yep. It is a last resort. And not many places will take the entire amount of the loan unless they are real deadbeats, just what is in arrears. These people didn’t sound like they were deadbeats or they would have pulled that money out before all this happened. I think it’s a bit of a mix up.
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