A while ago, Gail Vaz-Oxlade put out a simple Facebook post that blew my mind.
I had heard this could happen, but evidently it happens a great deal, when folks build up large debts, or get too delinquent with their debts. The terms of your banking agreements make this all legitimate (so read them over closely to see what other interesting things your bank can do, I am sure there are others), but it does seem interesting that banks want you to consolidate your banking in one bank, and they will entice you to do this with great “deals” on things.
Does this mean you should go out and diversify your assets and your debts so that they are at least arm’s length away from each other? Might not be a bad idea, if you are the kind of person that builds up large personal debt loads and is very likely not to pay those debts back (or has a tardiness streak in you), but then again, if you were that kind of person, would you think of this?
It seems there are folks who try to game the system, and will bounce around from bank to bank attempting to stay one step ahead of debtors prison (or the bill collectors), but I haven’t met many of those folks. Is your bank suddenly garnishing your money a real concern? Not for most folks, but it is something you should keep in mind, just like if you buy your lottery tickets with a credit card, it is treated like a cash advance.
File this one in your TIL file (Today I Learned).