Immediate Steps
1. Contact your bank to understand why the account is frozen and the amount frozen. 2. Determine who levied the account (creditor name, case number). 3. Check if federal benefit deposits are properly protected (automatic 2-month look-back). 4. Review the levy paperwork for your deadline to file an exemption claim. 5. Do NOT deposit more money into the frozen account -- it may also be seized.
Accessing Essential Funds
If the freeze is preventing you from paying rent, buying food, or purchasing medication, take emergency action: file an exemption claim immediately if any funds are exempt. File an emergency motion for release of essential funds. Contact legal aid for same-day assistance. If you have a second account at a different bank, the levy may not affect it (levies are served on specific banks).
Protecting Future Deposits
Open a new account at a different bank or credit union. Redirect direct deposits to the new account immediately. Do not keep funds in the levied account beyond what is frozen. A creditor may serve additional levies, but they need to know which bank to serve -- a new account at a different institution provides temporary protection.
Long-Term Solutions
Address the underlying judgment: negotiate a payment plan with the creditor, settle for a lump sum, or file bankruptcy to eliminate the debt and prevent future levies. A creditor can levy your account repeatedly until the judgment is satisfied. The only permanent solutions are paying the judgment, settling it, or eliminating it through bankruptcy.
Frequently Asked Questions
Can I still receive direct deposits into a frozen account?
Yes, direct deposits continue. However, new deposits may also be subject to the levy depending on state law and the type of levy (continuing vs. one-time). Redirect deposits to a new account immediately.
Can I write checks on a frozen account?
No. Checks will bounce, and you may be charged NSF fees. Automatic payments linked to the account will also fail. Update all automatic payments to a new account immediately.
Will the bank notify me about the freeze?
Banks typically send a notice, but you may find out first through declined transactions. The bank is not required to give you advance warning before freezing the account.
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