Consumer Proposal – Switching Banks
Hello there. Most of my debt is with Scotiabank. Unfortunately that is where my bank account is too. I was advised to change bank accounts if I was planning on a consumer proposal. Most banks won’t let me open a chequing account because my debt is high. I finally found an account I could open (an online account) and it’s with “Tangerine bank”. I just found out Scotiabank owns Tangerine. Can Scotiabank take funds from my Tangerine account if I owe them money? This is assuming they accept my CP and I’m making payments. Even though I’m making payments, can they take more money if it’s in my Tangerine account?
Posted from: British Columbia
On the date of the proposal, a bank can offset an account with a positive balance against a loan or an account with a negative balance. However, they can not take funds that are deposited after the date of the proposal. Nonetheless, this can get a bit messy around the time of the proposal so it is usually advisable to start a new account at another institution. The right to offset accounts only applies within each legal entity. Assuming Tangerine is a separate legal entity from Scotiabank, the right of offset does not apply between them. Scotiabank can not offset the balance of the loan owed to it by you against funds owed to you by its subsidiary, Tangerine.