How To Legally Unfreeze A Frozen Bank Account

Powerful Collection Tool

A very powerful collection tool is for a creditor to freeze a debtor’s bank account. Most large creditor law firms and other collection lawyers have the ability to find out where you work and where you bank. Once a creditor has obtained a judgment and has knowledge as to where you bank, the creditor can send a third-party citation to discover assets. This citation is served upon the bank and inquires as to what monies you may have on account at that financial institution. If you have an account at that bank, pursuant to the citation, the Bank is obligated to freeze twice the amount of the judgment for a short period of time. This gives the creditor an opportunity to bring a motion to turn over funds that belong to the judgment creditor. Other than a garnishment, there is nothing more devastating than to find out your bank account is frozen. After all, you lose access to your funds, your outstanding checks may bounce, yet you still may have direct deposit flowing into this frozen account.

Unfreezing The Account

One of the ways to unfreeze the account is by filing for either chapter 7 or chapter 13 bankruptcy. Provided you file your bankruptcy case prior to the order turning over the funds to the judgment creditor, you should be able to retain total control of your funds provided they don’t exceed a certain exemption amount. In the state of Illinois, you are allowed to exempt up to $4000 of miscellaneous personal property. Money that you have on account in a financial institution constitutes that type of personal property worthy of protection. The trick is to file your bankruptcy case prior to that turnover order being entered by the judge. If you wait too long and you file after the date the judge signs the turnover order, then those funds are not retrievable and remain properly in the hands of the creditor. However, if you act swiftly and beat that turnover date, the funds up to the extent of your exemption amount will be returned to you and your account will be free to operate once again.

Take Decisive Action

The problem with many debtors is they don’t take decisive action. They are aware that there is a judgment outstanding against them. They are aware that there assets that may be subject to an attachment. However, even when they receive notice of the seizure, they often wait too long to seek legal advice. After all, nobody sets out to file for bankruptcy. Those that do can nip the creditor in the bud and prevent their assets from being seized. If you are someone who is struggling financially and if you have an outstanding judgment currently against you, please note that your assets and your wages are subject to either a garnishment or an attachment. I would suggest that you contact my office for an independent review to see if bankruptcy can help alleviate your financial duress.

  • AS SEEN ON:Fox News Chicago
  • Chicago Sun-Times
  • Chicago Tribune
  • Daily Herald
Fox News Chicago Chicago Sun-Times
Chicago Tribune Daily Herald