A bank can take your deposit funds and reduce your debt under the doctrine of “setoff” if you owe that bank on a credit card, mortgage, line of credit or other debt. This is because these funds are not considered cash that you own, but rather a debt the bank must pay you upon demand. Post-bankruptcy, the bank may apply an “administrative freeze” by refusing a debtor’s request to make withdrawals or pay checks. At that time, the bank may move for relief from the automatic stay in bankruptcy to exercise its setoff rights, forever depriving the depositor of their funds. More details are available from this article.