The idea of borrowing money is inherently overwhelming: There's the application process, (hopefully) approval, and then eventually paying the money back—with interest. But it can also be difficult to know where to start with a loan, including which financial institution to borrow from. Your first instinct may be to head to the bank you've been using for years, as you likely have a fair amount of trust in it. But according to Ohio bankruptcy lawyerAdrienne Hines, this is something you should avoid at all costs.
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In a Dec. 29, 2023 TikTok video, Hines, who uses the handle @theladylikelawyer, says that this is one of her rules as a bankruptcy lawyer.
"I will never borrow money from the bank where I bank at," Hines says in the video. "What I mean by that is, I will never borrow money from an institution that has eyes on my actual deposits and my financial activity."
While no one ever plans to default, i.e. stop making payments, Hines points out that issues can arise if you do end up in this situation.
"If you ever can't pay that bill, the problem with your banking institution is, they know everything about you. They know that you're paid on the first and fifteenth of every month—or every other Thursday—they know, historically, if you get bonuses historically, etc., etc.," Hines says.
Because they have all of this knowledge and information, it allows creditors to come after you for payment that much faster.
"When you have a problem financially, the creditors who come after you the quickest are the ones who know the most about you, and that's why I would never borrow money from where I bank at," Hines says.
On top of this, you also have to worry about setoff, which the U.S. Department of Justice defines as the "equitable right of a creditor to deduct a debt it owes to the debtor from a claim it has against the debtor arising out of a separate transaction."
"They can take the money out of your account in many situations, in many states, under many rules," Hines says. "So...that's why I don't do that."
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But Hines' financial no-nos don't stop there. She first brought up her concerns about borrowing money from your regular bank in a Dec. 27, 2023 video, in which she highlighted a few other things she would "never do."
Hines said she would also never cosign a loan, which means you "are legally responsible for the whole debt if the other person does not pay," per her text overlaying the TikTok.
"Number one, I would never cosign on a debt—not for a child, not for my best friend, not for my sister—unless I was ready, willing, and able to take over the payments at any time, for any reason," she says.
Another no-no was related to unsecured debts, namely credit cards, medical bills, or personal loans.
"[If that debt] exceeded what I was going to get in a tax refund, I take the tax refund and file for bankruptcy and get rid of all my debt," Hines says.
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