Donato v. Dominion National Bank of Tidewater (In Re Donato)

OPINION AND ORDER

HAL J. BONNEY, Jr., Bankruptcy Judge.

The issue prevailing has not previously come before the Court as a result of Bankruptcy Reform Act of 1978 [the Code]. The debtors seek the turnover of funds held by Dominion National Bank of Tidewater pursuant to rights, it says, under the “setoff” provisions of 11 U.S.C. 553.

The Facts

The debtors signed a promissory note on October 20, 1979, with the Dominion National Bank of Tidewater for the purchase of a tractor. Subsequently, there was a default in payments and according to the exhibits and testimony, the tractor was voluntarily…