How to Stop a Collection Agency From Freezing a Bank Account

If you fail to settle your debt with a collection agency, that agency may freeze your bank account and seize the available funds to cover your unpaid debt. When a collection agency or creditor freezes a bank account--also known as a bank levy or bank account garnishment--a consumer no longer has access to the money in that bank account. Fortunately, there is a way to avoid having your bank account frozen by a collection agency.

Instructions

1

Contact the collection agency to discuss your options. The agency may allow you to settle your past due debt for less than what you actually owe. You can also try to negotiate a reasonable payment plan. Fortunately, most collection agencies will allow consumers to make monthly payments.

2

Get the agreement in writing before submitting your first payment. Ask the collection agency representative to send you a formal confirmation letter stating the terms of your agreement. The letter should include the total amount due, along with the appropriate due dates for your payments.

3

Submit the appropriate payments to the collection agency. It is important that you make your scheduled payments on time. If you miss just one payment, the collection agency may decide to move forward with a lawsuit and freeze your bank account.

4

When your account is paid in full, you will no longer need to worry about the collection agency freezing the funds in your bank account. Don't forget to ask the collection agency to send you a letter stating your balance is paid in full, and you have a zero balance on your account.

5

Confirm that your account information is updated with the credit bureaus. Give the collection agency at least 30 days to update your account status with the credit bureaus. You will need to order a copy of your credit report from all three major credit bureaus: Equifax, TransUnion and Experian. You can obtain a free copy of your credit report by visiting AnnualCreditReport.com.