Can a bank take money from a Business account and to pay charges on personal account

whiteknight · 15th May 2008, 19:24

I have a limited business account and a personal account with Halifax.

Due to bank charges totaling nearly £400 (a charge on a charge on a charge etc) they have stopped my personal account and frozen my business account. There are funds in the business account which are needed to pay my mortgage (also with Halifax) which is also in arrears and they are threatening repossession.

There is sufficient to pay all the mortgage arrears and want to know if they can take this money to clear the personal account fees or whether I can force them to pay this money to the mortgage account.

Its ironic that I have the money in one account but cant transfer it to another.

All help greatly appreciated.

Thanks
Chris

Hopeful1 · 16th May 2008, 23:18

Hi Whiteknight.

I'm not sure this post is in the right forum to get maximum help. I will ask someone to move it for you

steven4064 · 16th May 2008, 23:44

I will move the thread to general in the banks forum.

Generally the banks do have a right to offset - ie to move money from one account to another to cover debts. However, the 2 accounts have to be owned by the same person (pretty obvious really

) so whether the bank has the right in the your case will depend on whether the business account is yours (sole trader) or is owned by a company (which is a seperate legal entity)

whiteknight · 17th May 2008, 17:42

Thanks, the business account is a limited company account, which I am a director in but also the sole signiturary on it.

Thanks again

Chris

steven4064 · 17th May 2008, 17:56

Then I would say that the bank has no right to offset between the accounts

mnrbig · 18th May 2008, 14:03

That's the main reason for having a limited company, as it is a legal entity in it's own right. The fact that you are a director is irrelevant because the banks dealings are with the company for the business account and you as the individual for the personal account.

steven4064 · 18th May 2008, 15:16

Quote:

Originally Posted by mnrbig

That's the main reason for having a limited company, as it is a legal entity in it's own right. The fact that you are a director is irrelevant because the banks dealings are with the company for the business account and you as the individual for the personal account.

Exactly

A company is 'limited' because it limits the liability of individual shareholders (either to the face value of their shares or some fixed amount). The only way round this is if the bank gets a group of shareholders to give a guarantee - even this is limited to the amount of the guarantee.

whiteknight · 19th May 2008, 21:48

Thanks, does anyone know of any legislation to force them to release the funds in the business account as the account is frozen. Money can be paid in but they wont let me withdraw it.

Thanks

Chris

steven4064 · 20th May 2008, 15:04

for what reason have they frozen it - do you have a letter?

whiteknight · 20th May 2008, 15:19

They have frozen the business account because the personal account is overdrawn ie. withdrawn all banking facilities. I owe 1100 on mortgage arrears and there is 1400 in the business account and they are threatening to repossess the house. It infuriates me that they have the money but wont let me transfer it from one account to another. I have also tried to come to an arrangement to clear the personal account in installments but they arnt interested and say it is in the hands of a debt collection company.

Thanks for your help

Chris

whiteknight · 20th May 2008, 15:20

Sorry forgot to mention i have not received any letters from them only found out the accounts were frozen when i went into branch to withdraw money from the business account.

steven4064 · 20th May 2008, 15:24

From above, it seems that the business account is in the name of a limited company of which you are a director and the personal account is in your name. They have no right whatsoever to freeze the business account because of your personal debt IMO

gni03349 · 20th May 2008, 15:31

01422 391 096 - A O'Brien Head of LEGAL SERVICES... keep this handy.

It's The Halifax legal department (it's from a previous post on here, but it was from 2006, so the name might be out of date now. I wouldn't have thought the number was though).

The reason I posted it is because the legal department will know that a Limited Company is nothing to do you you as such. You just work for the company and happen to be the director of it. So it might be worth letting them know how their company operates (illegally... but we know that anyway).

steven4064 · 20th May 2008, 16:26

gni, I checked the number and is someone called Rachel (away from her desk but will get back to you if you leave your name and number).

whiteknight, I think you ought to do what gni suggests though, perhaps better in writing. Give them te details and point out the illegality of what your branch is doing - ask them to communicate with the branch and put them right.

I did this with Barclays on a different (but just as illegal) matter and the response was pretty instantaneous.

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