Can You Go to Jail for Overdrawing Your Bank Account?
You cannot go to jail for overdrawing your bank account. You may be charged an overdraft fee by your bank, and if you cannot pay the fee, the account can be turned over to a collection agency, who will not only attempt to recover the balance, but will charge you additional fees.
Other People Are Reading
-
Overdrafts
-
An "overdraft" is a withdrawal request from a banking account for more than the banking account's balance (for example, trying to pay for a $100 purchase when you only have $75 in your checking account) and "overdraw" is the verb. According to ABC News, 50 million people overdraw their bank accounts every year.
Fees
-
Most debit cards and checking accounts feature an overdraft protection option. If your account has overdraft protection, you can overdraw your account (the bank usually puts a limit on how much you can take out) --- for a fee, the terms of which are determined by your bank. If you do not have overdraft protection, you simply will not be able to use your debit card or withdraw money from your account when your account does not have enough money in it.
-
Worst Case Scenario
-
If you overdraft an account and then do not put enough money in to pay the overdraft fee and put your balance back above zero, your bank can turn your account over to a collections agency. The collections agency has a certain amount of time (depending on your state) to get you to pay. You will probably be charged more than just the overdraft fee, and your credit score will be negatively affected.
Laws
-
In 2009, the Federal Reserve instated new regulations with regards to overdrafts. Prior to the regulations, most checking accounts came with overdraft protection and were charged a fee every time the user overdrew the account. Now, banks must ask customers if they want overdraft protection and customers can opt out of any fee-based program.
-
