There is nothing more frightening than discovering that your bank account has been frozen. Unfortunately, this will likely happen as you try to take money out of an ATM or pay a bill online. Though you may panic, it’s important to remain calm and proceed carefully. The following blog explores why a creditor may freeze your bank account and how to remedy the situation with the assistance of an Arroyo Grande consumer lawyer to help with any issues you may have during these circumstances.
What Happens When My Bank Account Is Frozen?
When a bank account is frozen, it means that a creditor has obtained a court-ordered judgment against you to prevent you from taking funds out of your account. This is often used to pressure you to make payments and if necessary, to place a levy on your account to seize the funds.
It’s important to note that you are unable to withdraw funds from your account when it’s frozen. As such, you will not be able to pay bills or take cash out from the ATM. However, you can continue to deposit funds into your account.
Similarly, you may have exempt funds in the account. If you receive Social Security or federal railroad unemployment funds, the creditor cannot seize these funds under federal law. Additionally, if these are deposited directly into your account, banks are prohibited from freezing the income received in the previous two months.
Do Creditors Have to Notify Me if They Freeze My Bank Account?
In the event your bank account is frozen by a creditor, it’s important to understand that creditors nor your bank have to send you a notice that they are freezing your account before they do so.
To place a freeze on your account, a creditor must first file a lawsuit against you. Next, they must receive a court-ordered judgment against you. You are entitled to receive notification of both of these instances. However, the creditor does not have to give you advance notice that they are placing a freeze on your account.
When a bank receives a court-ordered judgment to place a levy on your account, they must do so immediately. As such, you may discover your account is frozen before you hear anything from the institution.
What Should I Do if My Account Is Locked?
If you discover that your bank account has been frozen, it’s critical to connect with an attorney as soon as possible to discuss your legal options. They may be able to help you vacate the judgment, which relinquishes the creditor’s right to freeze your account. As such, your account will open up. Additionally, they may be able to help you file an exemption to have your account released. However, you only have ten days to do so, meaning it is imperative to act quickly.
When you discover that your bank account has been frozen, the team at Loker Law is ready to assist you. We understand how disruptive this can be. As such, we will do everything possible to help you navigate these complex circumstances. Contact our firm today to learn how we can represent you.