[Must Read] Why Your Bank Account May Be Frozen

When your bank account is frozen, you cannot use
your money, outstanding cheques will not clear, and
you may be responsible for bank charges as a
result. When creditors freeze your account, it is also
called a bank levy, attachment, or garnishment.
A frozen bank account is an account that has been
suspended and cannot be used to withdraw money,
pay cheques, make transfers, or fund your bill pay
services.
Why is an account frozen?
Generally, an account is frozen because you owe
someone money. Your account can be frozen if you
have unpaid judgment against you, or if you owe
taxes.
How are creditors able to freeze my account?: Most
creditors will need to get a judgment against you
before they are able to freeze your bank account.
Once they have a judgment against you, if you have
not taken steps to pay the judgment or agreed to a
payment schedule for satisfying the judgment, the
judgment creditor can request that the court issue
an order that directs the bank to freeze your
account. These orders are often called garnishments
or attachments.
Is the entire account frozen or just part?:
In most cases, the bank can freeze up to two times
the amount that is set out in the garnishment or
attachment order. If this exceeds the amount in your
account, your entire account will be frozen. If it does
not, it will only be partially frozen
. Can I continue to make deposits?:
You can probably make deposits into the account,
but you stand the risk that the new deposits are
frozen as well. If the amount in the account at the
time it was frozen was less than two times the
amount set out in the garnishment or attachment
order, the new deposits will likely be frozen.
Will I receive advance notice?: It is unlikely that you
will receive any advance notice. The bank is required
to notify you when it receives the attachment but
the account will be frozen by the time you receive
the notice.
Challenging the attachment:
The notice that you receive should set out your
rights to object to the attachment and may identify
exemptions, which will allow the funds to be
released to you. The notice should provide the
deadlines for you to object or challenge the
attachment and identify the creditor and the case in
which the attachment has been issued. In most
cases, to challenge the attachment, you will need to
file papers with the court telling the judge why you
don’t believe the attachment is appropriate.
Getting your money back:
If you owe the money that the creditor is trying to
collect through the attachment, your options are
limited. You can contact the creditor or the
creditor’s lawyer to see if they will release the
attachment. If they won’t, you need to take further
action. Dealing with a court order on your account if
your creditor has taken court action against you for
a debt, they may have got a court order against you.
A court order means you have to pay the money
back, either in instalments or in full by a certain
date, according to Citizens Advice.
If you don’t keep to the terms of a court order, your
creditor has a number of different options to try and
get their money back.
If your creditor thinks that you have the money to
pay them and are holding it back, or are due to be
paid some money, which will cover the debt, they
can apply for another court order. This is called a
third party debt order. A third party debt order allows
your creditor to take the money you owe them
directly from whoever has the money.
Usually, it is your bank that is holding your money
for you. However, if you are due to get a lump sum
such as a redundancy settlement, an inheritance or
insurance policy pay-out, your creditor can get your
employer, solicitor or insurance company to pay the
money to them instead of you. They can only take
enough money to clear the debt.
The kinds of debts that may end up with your
creditor trying to get a third party debt order include
money owed on personal loans, credit cards,
overdrafts or hire purchase agreements.
A third party debt order is different from an
attachment of earnings order, where your creditor
gets a court order to take money from your wages.
If your creditor wants to get a third party debt order,
they will first apply for a temporary order called an
interim third party debt order. This order tells your
bank to freeze your account. At this point, your
account will be frozen but no money will be paid to
your creditor until the judge has decided what to do
at the final hearing.
– Written by Punch’s Nike Popoola

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