What exactly is a frozen account?

A frozen bank account is an account that has been disabled so that you cannot withdraw any money from it. You can still deposit money, but any money deposited will also be frozen until the account is released.

Accounts are typically frozen if you owe a great deal of money to a creditor, and they have pursued legal action against you. Accounts usually aren’t frozen until the creditor has exhausted other means of obtaining the funds owed. A successful legal action grants them a restraint on your account, so that you may not withdraw money from your account until your debts are paid, and they may use frozen funds to settle the debt owed.

A bank cannot freeze your account without a legal restraint. The bank is not required to notify you if they have frozen your account. However, creditors who are seeking funds from you are required to give you proper legal notification that they’re pursuing a lawsuit and if they have been granted a judgment against you. Notifications like this should not be ignored. It’s in your best interests to settle any claims with creditors before they feel their only recourse is to file a lawsuit.

Freeing your account from its frozen status is called “vacating” the judgment. This can be accomplished by paying off the debt owed. In some cases, based on the circumstances under which the account was frozen, you might need to enlist the help of a lawyer to vacate the judgment. For example, if your account consists entirely of funds considered exempt from collection, such as social security, disability, or child support, and has still been frozen, you will have to consult the creditor’s attorney. Your bank should be able to provide you with the necessary contact information.

Who can freeze bank accounts?

A debt collector or a creditor to whom you owe money can freeze your account, but only with a court injunction. Typically, the account is frozen for twice the amount determined by a legal judgment. That is, if the legal judgment determines that you owe $2,000, the account will be frozen for $4,000. If you have less than $4,000 in your account, this will show as a negative balance in your account.

Until you vacate the judgment on your account, you cannot withdraw money from it, nor can you write any checks on that account. In addition, any deposits made while the account is frozen will also be frozen.

Can the government freeze your bank account?

Yes. Some government agencies, such as the IRS, can even freeze or garnish your account without a court order. Government seizures of funds are generally related to criminal proceedings, such as tax evasion, money laundering, or suspected connections to terrorist activities or drug trafficking. Most government seizures also require a judgment, just as seizures by other creditors, and these judgments can be contested in court.

Even if a government agency has frozen your bank account, some funds might still be exempt from seizure. Consultation with a lawyer can help you determine if any funds are exempt. A lawyer can also help you contest the judgment that has allowed your account to be frozen.

Top 20 banks in the U.S.

1. BancWest (Bank of the West)—1-800-488-2265
2. Capital One—1-866-346-6549
3. Citigroup—1-800-374-9700
4. City National—1-800-773-7100
5. Comerica—1-800-266-3742
6. Commerce Bank—1-800-453-2265
7. Compass—1-800-COMPASS
8. Fifth Third—1-800-972-3030
9. First BanCorp—1-866-792-4357
10. First Citizens—1-888-323-4732
11. First Horizon National—1-800-364-7662
12. HSBC Bank USA—1-800-975-4722
13. Huntington—1-800-480-2265
14. JPMorgan Chase—1-212-270-0589
15. Marshall & Ilsley—1-888-464-5463
16. SunTrust—1-800-227-3782
17. Synovus—1-706-649-2311
18. U.S. Bancorp—1-800-872-2657
19. Wachovia—1-800-922-4684
20. Wells Fargo—1-800-225-5935

What exactly is a frozen account?