Owing your bank money and set-offs

Question

What happens to my bank account when I am accused of being delinquent on my debts?

Answer

If you have a debt with a bank that you also have a checking or savings account at, that bank can exercise "set-off" rights against you.  This means that if you owe your bank $200 for a line of credit and the payment is delinquent, the bank can take the funds from your checking account and apply it to their bill.

For more information about judgment creditors levying a bank account with your name on it, see the answer to: "What would happens if I cannot or refuse to pay my debts?"