Section 5.51 Setoff and the Administrative Freeze

LibraryBankruptcy Practice (2007 Ed. + 2015 Cum Supp)

8. (§5.51) Setoff and the Administrative Freeze

Banks in Missouri have a common law right to set off funds of the debtor to pay obligations owed to the bank, and the Bankruptcy Code specifically preserves this right in 11 U.S.C. § 553(a) with the limitation of certain exceptions. Under 11 U.S.C. § 362(a)(7), however, the automatic stay enjoins “the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor.” Thus, the Missouri bankruptcy...

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