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.
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.
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