Indiana § 26-1-4.1-502 Creditor process served on receiving bank; setoff by beneficiary's bank

Indiana Statutes

§ 26-1-4.1-502 — Creditor process served on receiving bank; setoff by beneficiary's bank

Indiana § 26-1-4.1-502

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 4.1Fund Transfers

This text of Indiana § 26-1-4.1-502 (Creditor process served on receiving bank; setoff by beneficiary's bank) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 26-1-4.1-502 (2026).

Text

(a)As used in this section, "creditor process" means levy, attachment, garnishment, notice of lien, sequestration, or similar process issued by or on behalf of a creditor or other claimant with respect to an account.

(b)This subsection applies to creditor process with respect to an authorized account of the sender of a payment order if the creditor process is served on the receiving bank. For the purpose of determining rights with respect to the creditor process, if the receiving bank accepts the payment order the balance in the authorized account is deemed to be reduced by the amount of the payment order to the extent the bank did not otherwise receive payment of the order, unless the creditor process is served at a time and in a manner affording the bank a reasonable opportunity to act

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(a) As used in this section, "creditor
process" means levy, attachment, garnishment, notice of lien,
sequestration, or similar process issued by or on behalf of a creditor or
other claimant with respect to an account.
(b) This subsection applies to creditor process with respect to an
authorized account of the sender of a payment order if the creditor
process is served on the receiving bank. For the purpose of determining
rights with respect to the creditor process, if the receiving bank accepts
the payment order the balance in the authorized account is deemed to
be reduced by the amount of the payment order to the extent the bank
did not otherwise receive payment of the order, unless the creditor
process is served at a time and in a manner affording the bank a
reasonable opportunity to act on it before the bank accepts the payment
order.
(c) If a beneficiary's bank has received a payment order for payment
to the beneficiary's account in the bank, the following rules apply:
(1) The bank may credit the beneficiary's account. The amount
credited may be set off against an obligation owed by the
beneficiary to the bank or may be applied to satisfy creditor
process served on the bank with respect to the account.
(2) The bank may credit the beneficiary's account and allow
withdrawal of the amount credited unless creditor process with
respect to the account is served at a time and in a manner
affording the bank a reasonable opportunity to act to prevent
withdrawal.
(3) If creditor process with respect to the beneficiary's account has
been served and the bank has had a reasonable opportunity to act
on it, the bank may not reject the payment order except for a
reason unrelated to the service of process.
(d) Creditor process with respect to a payment by the originator to
the beneficiary pursuant to a funds transfer may be served only on the
beneficiary's bank with respect to the debt owed by that bank to the
beneficiary. Any other bank served with the creditor process is not
obliged to act with respect to the process.