Originally Posted by
BusBoi
Thanks for the insight. Once the paycheck hits my bank account, is it fully truly "my money"? Does the out-of-business company have any legal right to claw back a paycheck, or are they just trying to money-grab whatever they can?
Originally Posted by
FriendlyPilot
ACH transactions can be reversed. Also wages are priority claims, but are limited in how much get paid and how long it takes. Don't expect that last paycheck to show up anytime soon, and there might not be enough after secured creditors are paid. The rest would be prorated, but high income earners like pilots would probably get a substantially lower final paycheck, if any, and a few months late.
Yes anybody who can ACH into your account can also ACH out of your account. You almost certainly approved that in the fine print when you authorized ACH in the first place.
If they do that, even in error, then it's your problem to get the money back.
If I have any significant cash sitting in checking, I at least move it to savings for that reason. If it's a really large amount I e-transfer it to another bank account.
I had it happen once, complicated insurance claim and the insurance company got confused and decided to "unpay" part of the claim. Fortunately for me I'd already paid the contractors, so the reverse ACH failed due to insufficient funds. But some banks might just tap savings or credit lines to cover a shortfall like that, not sure.
Also why I don't ever use debit cards... is somebody adds a zero to a credit card charge, the credit card company will just reverse it. If it comes out of your checking, that's your problem to try to get it back.