Can a Credit Card Company Put a Hold on Your Checking Account Without You Knowing?

Any creditor, including a credit card company, may place a hold -- also called a freeze -- on a bank account of a borrower who doesn't make payments on his debt. Before a creditor takes such extreme measures, she will notify the debtor of her intent to file a lawsuit that may result in a bank account freeze as one of the possible consequences.

Obtaining Money Judgment

Money judgment is a court order that allows a creditor to access the debtor's bank accounts to collect the debt. A creditor must file a lawsuit against a borrower and present the evidence showing that the debtor owes the money. The court will send a notice of a court hearing to the debtor. The court will issue a money judgment confirming that the debtor owes the creditor the claimed amount. The creditor may seek to collect the claimed amount but may not exceed it.

Notifying the Debtor

A debtor may not exactly know when a creditor is preparing to freeze his bank accounts. He does not receive a notification from the bank ahead of time. However, when a creditor files a lawsuit, a debtor receives the summons to appear at a court hearing. After receiving a money judgment, a creditor may freeze the funds in the debtor's bank account. A debtor can be aware of the impending freeze on his bank accounts if he reads the letter from the creditor and appears at the court hearing. He may also consult a qualified attorney if he needs legal advice.

Placing a Freeze

Once a creditor obtains the court judgment, she can present the papers to the bank that holds the debtor's accounts. The bank must immediately freeze the accounts and notify the account holder by mail no later than the following business day. The law does not require the bank to notify the account holder ahead of time. An account holder may find out about the freeze before he receives the papers if he attempts to withdraw the funds.

Seeking Legal Help

If a debtor believes that a creditor unlawfully placed a freeze on his accounts, he may seek legal advice. The court will vacate the judgment if the account holder can prove that the creditor has wrongfully entered the judgment against him. The court may also side with him if he has a good reason for not attending the initial judgment hearing. When the court vacates the judgment, it will issue an order to lift the freeze from the bank accounts.