Need Help with a Frozen Bank Account?
In New York, a creditor for a private debt must obtain a court judgment
before restraining any bank accounts. The creditor can restrain up two
double the amount of the judgment in any account under the Defendants
name, including joint accounts. There are
frozen bank account laws that place restrictions on the types of funds that can be subject to debt
collection. For example, social security income is protect from debt collectors,
as well as 90% of recent employment income. Under these laws,
most people are entitled to withdraw up to $2100 in frozen bank funds.
After the funds are restrained, if the creditor is subsequently able to
take the funds by a turnover proceeding or otherwise, they will levy the
full balance owed and leave you with the rest, so long as there is enough
funds in the account to cover the balance. If there is not enough to meet
their needs, they will continue to take whatever is added to that account
until the needs of the loan is met.
Resolving A Bank Restraint
Depending on the facts of your case, you might be able to contest the validity
of the judgment in court by bringing an
order to show cause and seek to have the judgment vacated. Alternatively, you can seek a voluntary
settlement with the creditor and see if they are willing to accept a reduced
sum to satisfy the balance. As an option of last resort,
filing for bankruptcy may protect you from further creditor action.
Need Help With A Frozen Bank Account?
Our attorneys have assisted many individuals with respect to resolving
frozen bank funds. Since there are funds in the account, we sometimes
work to structure these settlements with a conditional release, meaning
that upon payment of the agreed upon sum, the creditor would release the
remainder of the bank account balance. When possible, it's best to
also negotiate that the debt be settled in exchange for the payment, so
that the judgment is no longer an issue once the conditional release is
If your bank account is frozen, you might have a limited amount of time
to take action before the funds are seized. Contact our lawyers to learn
how we assist with resolving frozen bank accounts. The phone call is quick,
and the solution might be easier then you think.