Someone is short selling their home. The mortgage is with ABC Bank. They happen to have their checking or savings account at ABC Bank. So they stop paying on their mortgage. They thought their checking account was safe because it is a different account from their mortgage.

Then one day their debit card stops working. "Hmm, this is weird. I know I have money in this account. It should be working," they think to themselves. They go check their bank account balance and find out it has been sucked dry. In addition, their savings account has been wiped out as well. What could have happened?

Their lender levied their bank accounts to pay the mortgage that month. The sad thing is that most people in this situation are close to broke. Having their last bit of savings wiped out is devastating. Now they don't even have enough money for gas to get to work. Here is how to avoid having this happen to you. If you get behind on any type of loan, make sure your checking and savings accounts are with a separate entity. If you are behind on a car payment, move your account elsewhere. Make sure that your bank is not owned by the same institution.

For example, Wells Fargo recently purchased Wachovia. JP Morgan Chase purchased Washington Mutual. Bank of America purchased Countrywide. Now, some people think this doesn't matter because these lenders are so big. "Bank of America is huge! They will never notice that I have my checking account with them," they tell me.

Yes, that is often true. They might not notice. Or I've had people make the argument that they aren't allowed to levy a bank account. Yes, that might be true as well. But do you have time to read through the 20 pages of fine print for when you first opened your checking account? I'm not a lawyer and I would never try to go through all that. It's much simpler to simply move your account elsewhere before you miss a payment.

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