Can a Creditor Seize a Bank Account

Can a creditor seize a bank account? The question has been asked by many a debtor. Unfortunately, the answer is yes. Bank seizure by creditors involves a few steps, but creditors can get at your money if they want to. Understanding the steps involved in bank account seizure is important, as knowledge of the process can lead to solutions.

Judgment Creditors
Creditors cannot simply decide to seize a bank account. Rather, they must earn the right by obtaining an official court judgment. Once debt creditors have gained a judgment to seize a bank account, they have become a judgment creditor. This title means only that they have been given the right to seize a specific account.

A Frozen Account
When a judgment creditor seizes your bank account, it becomes frozen. Banks do not freeze an account out of choice. The law states that, when a judgment creditor seizes an account, the bank must freeze it. A frozen account cannot be accessed by the debtor, and it typically accrues a negative balance. The negative balance will reflect more than what you owe in the judgment, as banks put holds at twice the value owed, but you don't owe more just because your bank account was frozen.

Going To Court
The judgment that allows a creditor to seize a bank account is made by default. Because of this, debtors can attempt to overrule the judgment by stating their case in court. To do this, a debtor must fill out forms with a local small claims clerk. After this, a court date will be set. It is important to note that appearing in court does not secure a judgment in the debtor's favor. The judge may rule that the bank account should remain frozen.

Understanding the Bank Account Seizure Process
Having a bank account seized is scary. Bad creditors might threaten you with the bank seizing your account, but it cannot happen overnight. Creditors have to go through the courts. Understanding this process can make it easier to resolve the problem and keep you from making decisions under pressure.

Related Life123 Articles

Want to stop creditors calling and harassing you about your debts? Knowing your rights is the first step to putting an end to any abuse.

Need to know how to write a hardship letter? If you are in a tough position, tell your creditors about it. While there are no guarantees that they will renegotiate your debt, a hardship letter might help.

Frequently Asked Questions on Ask.com
More Related Life123 Articles

Is negotiating credit card debt yourself a good idea? If you have a good grasp of hard numbers, such as your interest rates and your monthly payments, you may be able to negotiate.

Knowing how to write a credit dispute letter can help you remove any errors that appear on your credit report as quickly as possible.

Need to know how to write a hardship letter? If you are in a tough position, tell your creditors about it. While there are no guarantees that they will renegotiate your debt, a hardship letter might help.

© 2014 Life123, Inc. All rights reserved. An IAC Company