echo1

Business checking - personal liability

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I have an old business checking account (business is closed) that a charge went through and the bank paid which put the acct in the red. Since then the bank has been charging $8 per day. I got a call about it roughly 30 days after this happened to let me know the account is backwards some $250. They are only willing to remove about $100 :lame:. I am wondering if there is a personal liability if I tell them I am not going to pay their outrageous fees and they can sue the business.

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Chances are very good that you are personally liable. We've dealt with 5 different banks in all out business adventures, and they all had clauses in the checking account agreements that said, in effect, an officer of the company assumes ultimate responsiblity for any overdrafts.

Last time, it was an automatic yearly draft by McAfee that smacked us. Even though the account had a $10 balance, the bank let the $35 debit charge go thru and then hit us with $35 a week in overdragt fees. Since we had already moved, it took about 3 months for the statements to catch up with use...so the total became like $600. I started off by calling McAfee and pointing out that I had never authorized the auto draft, so they reversed the charge. Then I hade to write a letter to the President of the bank to make the overdraft charges go away.

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I am not surprised if there is a personal guarantee. I am more upset that the bank paid something on an account that had no activity for nearly year. I will talk with branch manager and see what I can do. I think I have some valid arguments, but it seems that fees are the bank's bread and butter these days.

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A big part of it that I remember from the business law classes (before the era of everything going electronic) I took in college is that a "check" is a very different animal; a negotiable instrument.

So that in of itself, for decardes, has a legal standing that is far different than overcharing a credit card. Not only do you owe something, it also has serious legal ramifications and potential that will land you in the can with somebody who wants to start calling you Susan. There still is no debtors prison but a negotiable instrument is treated far differently.

In essence, even if you didn't do it (and that includes an inactive account), you are still on the hook. Over time laws have gotten better and they have gotten worse, depending which state you are in.

That being said charges and fees are not negotiable instruments. But having an inactive still has all the potential of something happening that you will be liable for. But probably less so today with electronic banking although financial institutions are still eager to charge fees.

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spoke with the branch manager and got it worked out...still had to pay some, but got a lot of the fees removed after explaining the reason it went in the red. Anyway, thanks everyone for your thoughts, the account is closed.

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spoke with the branch manager and got it worked out...still had to pay some, but got a lot of the fees removed after explaining the reason it went in the red. Anyway, thanks everyone for your thoughts, the account is closed.

That is really good news!!!

One key advice that struck me years ago:

If you don't ask, you don't get...

So even though you still had to pay something, it is sure much better than having to pay everything. And that is the result of asking (sometimes firmly asking).

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The manager knew in his/her heart of hearts they were in the wrong. He or she did the right thing. Good thing too because you type like you would have sued back when they sued you. They sue you for $550 and you would have cross them for $2500 based on unfair business practices or some other tort. They saw the error in their ways and your superior position. You were they boss of them.

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