If the debtor and creditor are indebted to each other prior to commencement of the Bankruptcy case, the creditor generally may set off against its claim the amount it owes the debtor against the amount the debtor owes the creditor provided the creditor does so before a bankruptcy petition is filed (otherwise, exercise of the setoff right could violate the automatic stay).
Set-off requires the “same parties, same capacity.” This means the deposit account at the Bank must be in the same name as the debt owed to Bank. The party must also be acting in the same capacity.
Example: John Doe individually is not acting in same capacity as John Doe, Trustee for Children of George Lee.