If you have been called to a court hearing by a creditor, that creditor is pursuing its legal right to file suit and is interested in recouping debts as quickly as possible. If you miss the hearing for any reason, the court will likely award a default judgment, which can fast-track the legal process that allows the creditor to seize your bank assets. However, the freezing of a bank account requires action on the creditor's part, and its delayed actions or a debtor's appeals can add many months to the process.
Legal Process
The legal process a creditor must follow in order to pursue an attachment of your assets, including your bank account, can take many months before the case reaches court. Depending on state law, a creditor must deliver a certain amount of missed payment notices in order to have the legal standing to sue a debtor. A creditor can start the legal process by filing a summons for the debtor to attend a court hearing; debtors typically have 10 to 30 days to respond. If the debtor does not attend the hearing or answer the summons, the court awards a default judgment to the creditor.
Time Frame
As soon as it is awarded the default judgment, a creditor is free to begin filing the necessary paperwork to freeze your bank account. To freeze the account, a creditor needs to know the exact bank and branch holding the account funds; this can be obtained by filing an informational subpoena sometimes referred to as a financial disclosure statement, which can take about two weeks to receive. Once the creditor has identified the account to be levied, it can file a writ of execution against property through the court that awarded the judgment. This tells the sheriff which assets to legally seize on behalf of the creditor. For local accounts, this may be completed in a week or two, but when debtors live in another state than the court awarding the judgment, it can take three months or longer.
Appeals
Even after a bank account becomes frozen, a debtor has various legal resources for opening up his frozen bank account. If you or your attorney believe you may be able to contest the validity of the creditor's judgment, you can file an Order to Show Cause to Vacate the Judgment to have the court hold a hearing on the matter. You may also be able to file a general appeal on the judgment to prevent the plaintiff from freezing your bank account; depending on state law, you may have up to a month after the hearing to file this appeal.
Considerations
Under certain conditions, a debtor's bank accounts can be frozen without ever having a default judgment decided against him by a court. Private debts require the default judgment but public matters, including tax debts or child support debts, can be pursued by public officials without a default judgment. In addition, if your creditor is also the financial institution holding your bank account, it may have the legal right of "setoff," allowing it to freeze the account automatically. Although creditors are responsible for informing debtors of the bank freeze, the first notice of the frozen account comes from the bank, which often sends a notice to the debtor within one business day.
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