Frozen Bank Accounts

When a bank account is frozen, it is temporarily out of service. That means that while you can put money into your account, you cannot take money out. Any checks you write will not clear and any bill pay services that you use online will not process. You also will not be able to transfer money out of the account. This type of a freeze can be done by a creditor to whom you owe money who has obtained a court judgment against you. It can also be done by the IRS for unpaid taxes or by a governmental agency enforcing child support payments; these agencies can freeze your account without a judgment but through issuance of their own documents. A freeze on your account is also called an attachment.

Generally, the amount frozen is two times what you owe the creditor or state or federal agency. If that amount is more than what you have in your bank account, then your entire account will be frozen. If it is not more, then you will be able to use the amount of funds left over. Any new deposits made into an frozen account that has less than two times what is owed will be frozen as well. If you have direct deposits made into your account, those deposits will also be frozen in situations where the account total is less than two times what is owed. You would have to stop the direct deposit activity to access those funds in some other way.

Your bank is required to notify you if it receives an attachment which will freeze all or part of your account. Once you receive the notice, however, it is likely that the freeze has already taken place. To handle a freeze, you will generally have to follow the steps outlined in the notice which involves filing documents with the court which object to the freeze with evidence showing why the freeze is wrong.

Bankruptcy and Debt Relief in New York

Having a bank account frozen by a creditor is just one of the adverse consequences of insolvency. Those facing overwhelming debt also run the risk of foreclosure, repossession, and harassment from creditors and collection agencies. This often comes about after a job loss, reduction in wages or hours, costly and unpredicted medical expenses, an expensive divorce, or merely poor money management. Unfortunately, in the tough economic times of the recent recession, many New Yorkers have found themselves facing a financial crisis.

At Jacoby & Jacoby, the legal team deals with those under financial duress every day. Established in 1964, this is a debt relief and bankruptcy law firm that has stood the test of time. The legal team has over 50 years of combined experience in this field and has handled more than 15,000 bankruptcy cases. That amounts to an elimination of millions of dollars of debt for their clients. If you have had your bank account frozen or are facing any other negative consequences from overwhelming debt, you owe it to yourself to get the legal help you need. The firm has offices in Medford, Shirley, East Meadow, Central Islip, and Fresh Meadows. Contact them for a free case evaluation to get started.