Negative IOLTA Balances: The Trust Accounting Violation That Disbars Lawyers (and How to Prevent It)

A negative client balance — even for one day, even for one dollar — is treated as misappropriation in most jurisdictions. The bar's presumption is against you until you prove a clerical error. Here is exactly how negative IOLTA balances happen, how state bars detect them, and the four-layer control structure that prevents them.