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Can a bank access a person's account and take mortgage arrears?

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  • 09-10-2012 2:39pm
    #1
    Ormus
    Registered Users Posts: 3,913 ✭✭✭


    If a person was in arrears of mortgage and they received a large redundancy payment, could the bank take the redundancy payment out of one account and use it to pay themselves the mortgage arrears?

    Apologies if this is not a legal question, it seems to fall between legal and financial.


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    #2
    Tom Young
    Legal Moderators, Society & Culture Moderators Posts: 4,338 Mod ✭✭✭✭Tom Young


    It depends on the terms of the mortgage and your banking arrangements.

    Set-off is commonplace in banking practice so if the default was severe then yes.


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    #3
    Tiradon
    Registered Users Posts: 59 ✭✭Tiradon


    If you're paying your mortgage by Direct Debit, you've essentially given the bank permission to take what is due to them at a given point in time (rather than a Standing Order where you would have control over what is paid). So in short, if sufficient funds appear in your account, they could apply for and receive them.


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    #4
    Condatis
    Registered Users Posts: 651 ✭✭✭Condatis


    When opening an account you should consider whether set-off is appropriate in the circumstances under which your accounts operate.

    Set-off may suit the bank but if you have funds in one account which you intend to apply to a particular purpose (ie Revenue) a set-off funds transfer could cause difficulties.

    It is my practice, where there is a box to allow or not allow set-off I don't tick it. If there is a clause in the Terms and Conditions permitting set-off I strike it out before signing the mandate.

    That said; in many circumstances set-off would be standard practice. However, you do need to be aware that it could be applied without notice. Should that not suit you use a different bank for the funds that you want to keep separate.


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    #5
    Our man in Havana
    Closed Accounts Posts: 29,476 ✭✭✭✭Our man in Havana


    It is always a good idea to keep your mortgage and current account in separate banks.


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    #6
    HellFireClub
    Closed Accounts Posts: 3,912 ✭✭✭HellFireClub


    Our man in Havana wrote: »
    It is always a good idea to keep your mortgage and current account in separate banks.

    Most valuable legal opinion I've ever read on this site! :cool:


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    #7
    Boskowski
    Closed Accounts Posts: 5,361 ✭✭✭Boskowski


    Regardless whether they can or not they will obviously know about the money and you will at the very least have to conjure up a pretty good reason why you wouldn't want to pay up now I imagine. Which may of course play a role with regards to any lenience the bank will show towards your situation in the future.


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    #8
    WhatNowForUs?
    Closed Accounts Posts: 687 ✭✭✭WhatNowForUs?


    HellFireClub wrote: »
    Our man in Havana wrote: »
    It is always a good idea to keep your mortgage and current account in separate banks.

    Most valuable legal opinion I've ever read on this site! :cool:
    Until the bank buys or is given your Mortgage company.


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    #9
    Ormus
    Registered Users Posts: 3,913 ✭✭✭Ormus


    Thanks to you all, this has been helpful.


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