How long can creditors freeze a bank account?

Answer

Creditors can legally require a bank to freeze a bank account for a few weeks or until the debt is paid. Nolo explains that any funds that are in the account at the time of the levy are used to satisfy the debt, which can lead to bounced checks and additional bank fees. Bank garnishments that result in account freezes are activated when a creditor wins a court judgement.

Putting additional funds into an account that is frozen may lead to those funds being inaccessible as well. An account can be frozen quickly, and account holders generally only receive notice of the situation once it has occurred. Once an account is frozen, the account holder must act quickly to lift the freeze, according to legal advice site Lawyers.com. This requires the account holder to file legal papers with a court stating why an exemption from the freeze is warranted. Proving legal exemptions requires turning in copies of detailed paperwork, such as paycheck stubs, bank deposit receipts, government, insurance, pension and real estate documentation. Income from alimony, child care, social security and disability may be exempt from such freezes.

About.com advises that the best way to avoid having an account frozen by creditors is to contact them to make arrangements to make payments on the debt owed.

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