Answer:
Aside from prohibitions against setoff to cover credit card balances (Regulation Z, 12 CFR 226.12(d)), setoff or offset is governed by the laws -- in some cases common law -- of the several states. There are very few sweeping statements we could make here at BOL that would assist you on this. You'll have to consult with your state's banking association and/or local counsel.
As for setoff against government benefits, see CourtWatch and scroll down to Social Security offset article.
First published on BankersOnline.com 08/02/04
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