(a) For the purposes of this section: (1) âCustomerâ means one or more natural persons. (2) âDebtâ means an interest-bearing obligation or an obligation which by its terms is payable in installments, which has not been reduced to judgment, arising from an extension of credit to a natural person primarily for personal, family, or household purposes, and does not mean a charge for bank services or a debit for uncollected funds or for an overdraft of an account imposed by a bank on a deposit account. (b) A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof. (c) Not later than the day following the exercise of any setoff with respect to a deposit account for any debt claimed to be owed to the bank by a customer, the bank shall deliver to each customer personally or send by first-class mail postage prepaid to the address of each customer as shown on the records of the bank a written notice in at least 10-point type containing the following: (1) A statement that the bank has set off a debt or a portion thereof against the customerâs deposit account, identifying the account, and giving the respective balances before and after the setoff. (2) A statement identifying the debt set off against the account and giving the respective balances due before and after the setoff. (3) A statement that if the customer claims that the debt has been paid or is not now owing, or that the funds in the deposit account consist of moneys expressly exempt pursuant to Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, and listed in the notice, the customer may execute and return the notice to the bank by mail at the address shown or personally to the bank branch where the customerâs account is maintained not later than 20 days after the date of mailing or personal delivery. (4) A statement that if the notice is executed and returned, the bank may file an action in court to collect the debt; that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend; and that if the bank is successful, the customer will be liable for court costs, and attorneyâs fees, if the debt so provides. (5) A response form in at least 10-point type containing substantially the following: âThe debt described in the Notice of Setoff received from the bank is ____ is not ____ my debt or the debt of another person in whose name the account is maintained. âI claim that the debt: has been paid. is not now owing. is not subject to setoff because the money in the account is: Paid earnings (CCP 704.070) Proceeds from execution sale of or insurance for loss of a motor vehicle (CCP 704.010) Proceeds from execution sale of household furnishings or other personal effects (CCP 704.020) Relocation benefits (CCP 704.180) Life insurance proceeds (CCP 704.100) Disability and health insurance benefits (CCP 704.130) Workersâ compensation benefits (CCP 704.160) Unemployment or strike benefits (CCP 704.120) Retirement benefits including, but not limited to, social security benefits (CCP 704.080, 704.110, 704.115) Public assistance benefits including welfare payments and supplemental security income (SSI) or charitable aid (CCP 704.170) Proceeds from sale of or insurance for damage or destruction of a dwelling (CCP 704.720, CCP 704.960) Proceeds from execution sale of or insurance for loss of tools of a trade (CCP 704.060) Award of damages for personal injury (CCP 704.140) or wrongful death (CCP 704.150) Financial aid paid by an institution of higher education to a student for expenses while attending school (CCP 704.190) âI declare under penalty of perjury under the laws of the State of California that the forego
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