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Can Creditors Freeze Bank Accounts? | San Luis Obispo County, CA Debt Defense Attorney

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woman learning her bank account is frozen

When you try to make a payment only to realize your bank account is inaccessible, you may begin to panic. With bills to pay, a frozen bank account can create extensive financial issues. This could be due to outstanding debt payments against you, as creditors freeze bank accounts as a means of obtaining payments. Though nerve-wracking, there are steps you can take to regain access. If your bank account was frozen, you’ll want to keep reading to learn how you can reclaim control of your account with the help of a California debt collection defense attorney.

Why Do Creditors Freeze Bank Accounts?

If you have outstanding debts, creditors can place a freeze on your bank account to pressure you to make payments. This is entirely legal, as creditors must obtain a judgment before proceeding. You will not receive a notification from your bank when the account is frozen, as they must free the account immediately after receiving the notice. This means you will likely find out your funds are inaccessible when trying to make a payment.

When your account is frozen, you will not be able to make payments, withdraw money, or transfer funds. This includes paying bills or using ATMs. However, you can still view your accounts and funds can be deposited.

Are There Any Exempt Funds?

There are some funds that are exempt from this judgment. These include Social Security funds, child support, workers’ compensation, and veterans’ benefits.

If your account is frozen, you must file an exemption claim quickly. If you were served in person, you only have 15 days to file. However, if you served the notice by mail, you have 20 days. This helps prevent creditors from escalating to levying funds from your account.

What Should I Do?

If your account is frozen, contacting an attorney is vital to protecting your funds. An attorney can help examine whether or not the creditor followed the proper procedure before freeing your account. For example, before a creditor can lock your funds, they must file a lawsuit against you. If you were never served papers, and they escalated to freezing funds, the judgment may not be legal.

You should also gather evidence that you’ve made payments to the creditors, as this can help prove you had a track record of making payments, and freezing the account was unnecessary.

An attorney can also help you vacate, which erases the judgment against you and immediately unfreezes your account. However, you will need the assistance of an attorney to guide you through the process of protecting your funds.

If you need help regaining control of your accounts, don’t wait until it’s too late. Reach out to Loker Law, APC. Our firm has the experience necessary to help guide you through the legal process to provide the best possible outcome for your circumstances.

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