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If a bank goes bankrupt, are deposit box contents lost?
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Geode
User ID: 303087
 United States
10/2/2007 2:35 AM
Report abusive post | If a bank goes bankrupt, are deposit box contents lost?
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I just had a terrifying thought given the precarious financial position that many US banks are in today,(having just read the thread "Why is the US dollar crashing...) which is that should one's bank lock its doors, are all of the deposit box contents co-mingled with the banks assets before distribution in a bankruptcy proceeding. Under banctruptcy law creditors with a higher priority placement often get fully paid back, and other lower ranked "creditors" lose out completely. Bankruptcy laws have changed since I went to law school, does anybody out there know????? |
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Geode
User ID: 303087
United States
10/2/2007 2:55 AM
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The carolynbaker.net linked article(that is part of the above referenced thread)was especially distressing, in that it reminded me about the many trillions of dollars of derivatives and phony paper etc., etc., that are lurking out there and which will soon be appearing. These "depth charges" will plunge many balance sheets to irretrievable depths. As the Trinity thread concerning the FDIC insurance fund this weekend so aptly pointed out, only a tiny percentage of the deposited funds will be covered when the financial rug is pulled out from under us. If any of you out their have gold, silver, gems or tangible assets in deposit boxes, perhaps you should look into a super heavy safe, or sink a floor safe into the concrete foundation under the carpet of some central room in your house. Then pull the goodies out of the banks' vault, and rest a little bit easier. |
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Geode
User ID: 303087
United States
10/2/2007 3:17 AM
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I checked with the FDIC regulations, and the deposit boxes are not legally considered a "bank deposit", and are therefore not covered by the depositors' insurance. The deposit boxes from a legal standpoint, are considered as "a well secured rental space", and the contents are the renters' property. So the contents shouldn't get co-mingled with the bank's assets. Things still could get quite messy, and some employee could get sticky fingers, or it could be many months or even years until you recover your property. So monitor your bank's financial status, or move your stuff to a safer institution, or a secure hiding place. |
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Anonymous Coward
User ID: 306465
 United Kingdom
10/2/2007 3:19 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Its an interesting point.
There is nothing forcing any bankster to actually follow any laws. I mean the president of the United States doesn't regard laws as important ... there's nothing stopping any of them from just using every loophole at their disposal to seize all assets.
A contract is just a piece of paper these days. Its useful for blowing your nose, wiping your bum ... but with all the lying and skulduggery happening in the banks, you might simply find that one day you go to get your preciouses from the boxie and it will be lost and you'll be tied up in paperwork and legislation for the next 25 - 50 years.
Gee didn't I just wake up on the wrong side of the bed 
Don't worry OP, most of this was sardonic irony. The problem is its conceivable. I would rather bury treasure in the middle of a field somewhere than put it in the clutches of the banks. |
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Anonymous Coward
User ID: 296936
United States
10/2/2007 3:26 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Yes, they're going to steal any contents. Trust me, I know. |
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annwho2
User ID: 263160
United States
10/2/2007 3:37 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
I read someplace that when the economy faltered, the government reclaimed gold coins, so gold coins were confiscated. Otherwise the contents of the safe deposit boxes were secured and returned to the owners. What would happen now, is difficult to say. The contents of the safe deposit box should be secured and separate from the "Books" of the bank. Many have items of value there because our homes are not secure. Now that we can have a warrentless search, items could come up missing at any time and claimed to be removed due to any reason, so our heirlooms may not be secure. If the bank deposit box is not safe, then we are all living in some third world country and not the United States of America that we have pledged alliegance to all our lives. The day robbers and thieves run a country, it is lost. My thoughts are that a safe at home is an invitation to robbery. But who am I. The PTB do what they will, and history often repeats itself. |
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Anonymous Coward
User ID: 298368
United States
10/2/2007 4:52 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
I'm out. They did it in the 1930s, an agent had to be present.
BANK OF AMERICA & COMPASS BANK MANAGERS WERE TOLD HOMELAND SECURITY WILL CONFISCATE SAFE DEPOSIT BOXES
[link to bellaciao.org] |
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Megadeth
User ID: 306491
United Kingdom
10/2/2007 5:04 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Generally savers money or deposit money is backed up by a insurance of some kind.
However how much you can trust this is anyones guess.
I would imagine if it was just one bank, the taxpayers foot the bill.
If all the banks are going under including the central bank, then you're as good as fucked. |
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ERIC
User ID: 296455
United States
10/2/2007 5:13 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
My great aunt and uncle work for a local bank. Inside the last 2 months they've told me to pay my bills IN FULL and remove items from my safety deposit box (which I have done). They won't tell me why,but I already know why....the Feds will come in and take what they want. I have to agree with my uncle when he said "It'll be a cold day in Hell before the get my 3G's" (that's gold,guns and grub). |
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Anonymous Coward
User ID: 287857
United States
10/3/2007 12:36 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Yes, they're going to steal any contents. Trust me, I know. Quoting: Anonymous Coward 296936
Some are honest but unfortunately most bankers are not. They are like many attorneys and one can argue any side of the coin and justify it with intellectual rhetoric and subterfuge.
This poster is honest. |
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Geode
User ID: 303087
United States
10/3/2007 12:57 AM
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If you are a renter, or don't have a concrete floor to sink a floor safe($200 if you install it)into, then put some inside of hamburger and freeze it solid in your freezer, or put it in a package taped and glued to the bottom of your refrigerator, or put a package of your goodies inside of the forced-air-ducts from the furnace, or behind the washer and/or dryer in your home. Perhaps behind the hot water heater, or in the walls inside of a pipe that looks like it's hooked up to your plumbing, and then dry wall up the installation hole, patch and paint. Remember where you hid it! Even if someone breaks into your place, it would be highly unlikely anyone would find your stuff. Skip the hamburger idea as it is one I read about on the web, so maybe a crook read about it too, or they may be really hungry and take your "hamburger" with them, another danger of that idea is that the weight of the hamburger package could be a giveaway if more than one or two ounces is inside the meat!!! LOL |
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The Monk
User ID: 306956
United States
10/3/2007 1:11 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Interesting question. The SEC, which licenses financial brokers, specifically deals with assets so they are never co-mingled with the firms assets and always returned to the investor if a firm goes belly up. But Banks and safe deposit questions- Ahhhhhh. Very interesting question. My guess is that since bankers write the laws then the answer to your question is an emphatic NO. Your deposits would get pinched like the small kids lunch money. |
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Anonymous Coward
User ID: 306942
United States
10/3/2007 1:16 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Geode, wrap it up in a Topps hamburger wrapper with the e.coli warning taped to it.
Yeah.. |
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Bookworm
User ID: 306958
United States
10/3/2007 1:17 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Ancient Oriental wisdom :
He who piles up treasure has much to lose.
:-P |
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Geode
User ID: 303087
United States
10/3/2007 1:25 AM
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More Advanced Oriental Wisdom:
"He who has no treasure piled up had best live in a very dry desert, and never encounter a rainy day!"
Topping the Topps hamburger idea, is to put your goodies in a sealed container in the freezer with a warning label saying: "Enclosed spores to be released only upon instruction from Pakistan." |
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Anonymous Coward
User ID: 57108
United States
10/3/2007 1:36 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
I was thinking of opening a Deposit box in a Canadian Bank?
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Anonymous Coward
User ID: 306942
United States
10/3/2007 1:39 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
I guess if they're looking through your freezer, you're screwed anyway. |
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Jdd
User ID: 289550
 Canada
10/3/2007 1:50 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
I've been sitting in a courtroom everyday for the last several months, writing a book about a lawsuit between a plaintiff (individual & company) and one of Canada's largest banks. We've been hearing a lot of testimony about the handling of safety deposit boxes.
Here are a few bits that might be relative to OP's question:
If the bank customer has signed a security agreement for something like a personal loan, credit card, line of credit, trading account, or the like, then if the bank considers the customer to be in default, they can seize the contents of safe deposit boxes. They're not required to open them up and determine the value of contents at the time of seizure. They can just take them, and in their own sweet time have them drilled & opened, inventoried, and valued. Depending on the circumstances, they can liquidate them to pay off what they *say* is owed to them.
If the customer disputes the debt, s/he may well be faced with litigating in order to settle with the bank. But even that apparently doesn't preclude the bank from liquidating the contents of safe deposit boxes. If they think value is there they can seize and liquidate, and fight about the principle of the thing later... if the customer can afford to go all the way though litigation to get their day in court.
Personally, I wouldn't trust anything at all of value to a safe deposit box in any bank in the world these days: not money, not personal papers, nada. Better to bury it in the backyard and draw a treasure map.
The only exception might be a Swiss account… but I'm too poor to know how they work. |
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interest bump
User ID: 307064
United States
10/3/2007 9:06 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
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Anonymous Coward
User ID: 293171
United States
10/3/2007 9:09 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
"safe deposit box" is an oxymoron. They are anything but safe. There are about a zillion ways you could be denied access to your own property, including a simple failure of the financial institution.
Anyone who uses one in this day and age is an absolute complete total moron. |
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Anonymous Coward
User ID: 300245
United States
10/3/2007 9:14 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Armed recovery would seem to apply. |
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19.47™
User ID: 6933
United Kingdom
10/3/2007 9:16 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
298368,
"I'm out. They did it in the 1930s, an agent had to be present."
Yeah I remember reading something like that about seizing peoples gold in the 30's. |
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Anonymous Coward
User ID: 293171
United States
10/3/2007 9:18 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Armed recovery would seem to apply. Quoting: Anonymous Coward 300245
you've been watching way too many movies.
Just stay away from safe deposit boxes. Get your own fireproof box and make a hiding space for it somewhere. |
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Anonymous Coward
User ID: 158854
Canada
10/3/2007 9:45 AM | | Re: If a bank goes bankrupt, are deposit box contents lost? | Quote |
Don't worry OP, most of this was sardonic irony. The problem is its conceivable. I would rather bury treasure in the middle of a field somewhere than put it in the clutches of the banks. Quoting: Anonymous Coward 306465
I have buried my most prized position: a metal detector.
How's that for "sardonic irony"?  |
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