What Control Do You Have When Your Bank Account Has a Freeze on It?

Creditors will often attempt to put a freeze on an individual's bank account if the person has failed to pay the money he owes on a debt. After the bank account is frozen, the creditor may then attempt to extract money in an amount equivalent to what the debtor owes. When the account is frozen, the debtor will have limited control and will only be able to perform certain actions.

Freezing

In order to freeze an account, a creditor must first receive a civil judgment against an individual and have a civil judge agree to freeze the account. Depending on the law of the state in which the account is frozen, the individual may be notified ahead of time. All banks ordered to freeze an account by a court of law must comply. After the account is frozen, the bank will restrict access by the account holder.

Actions

While an account is frozen, an individual will be able to look at the balance of the account and see what transactions have been made. However, he will not be able to make withdrawals or to shift money out of the account to another account. However, he will be able to deposit additional money into the account and he will be able to receive outside payments into the account, too.

Exemptions

There are a number of different assets that are legally exempt from freezing. For example, most types of federal benefits cannot be legally frozen. If assets in an account derived from exempt types of payment are frozen, then the person can request that a judge overturn the freezing and restore him access to these payments. In additional, a person who holds a joint account with a debtor may be able to reclaim his own assets from a frozen account.

Solutions

After an account has been frozen, an individual will have the opportunity to appeal the freezing to a court. Generally, depending on state law, the individual will be allowed to plead his case before a judge, who will decide if the freeze should remain in place. If the freeze has been placed illegally, then the judge will have the freeze removed and the individual will have access to his account restored.