Common use of Setoff and Security Interest Clause in Contracts

Setoff and Security Interest. If you ever owe the Bank money as a borrower, guarantor or otherwise, and it becomes due, the Bank has the right under the law (called setoff) and under this agreement (by which you grant the Bank a security interest in your deposit account) to use the money from your account to pay the debt. The Bank may use the money to pay the debt even if withdrawal results in an interest penalty or dishonor of checks. In the case of a partnership or joint account, each partner or joint owner agrees that the Bank may use the money in the account to satisfy any one of their individual obligations. Similarly, each partner or joint owner agrees that the Bank may use the money in the account to satisfy any one of their individual obligations. Further you are granting the bank a security interest in your account. The security interest granted by this Agreement is consensual and is in addition to the Bank’s right of setoff. You agree that the Bank’s right of setoff or its right to realize upon its security interest automatically arises in any instance in which an account in your name has been attached, garnished or otherwise subject to a lien, whether or not your obligation to the Bank is then in default. You agree that the Bank’s right of setoff takes precedence and priority over any garnishment, attachment or other lien and, as a result, the Bank may first apply the funds in your account to satisfy all or a part of your obligation to the Bank before honoring the garnishment, attachment or lien.

Setoff and Security Interest. If you ever owe the Bank money as a borrower, guarantor or otherwise, and it becomes due, the Bank has the right under the law (called setoff) and under this agreement (by which you grant the Bank a security interest in your deposit account) to use the money from your account to pay the debt. The Bank may use the money to pay the debt even if withdrawal results in an interest penalty or dishonor of checks. In the case of a partnership or joint account, each partner or joint owner agrees that the Bank may use the money in the account to satisfy any one of their individual obligations. Similarly, Similarly each partner or joint owner agrees that the Bank may use the money in the account to satisfy any one of their individual obligations. Further you are granting the bank a security interest in your account. The security interest granted by this Agreement is consensual and is in addition to the Bank’s right of setoff. You agree that the Bank’s right of setoff or its right to realize upon its security interest automatically arises in any instance in which an account in your name has been attached, garnished or otherwise subject to a lien, whether or not your obligation to the Bank is then in default. You agree that the Bank’s right of setoff takes precedence and priority over any garnishment, attachment or other lien and, as a result, the Bank may first apply the funds in your account to satisfy all or a part of your obligation to the Bank before honoring the garnishment, attachment or lien.