Frozen Bank Account Lawyers in New York

Is Your Bank Account Frozen? Let Us Help You Today!

Discovering that your bank account has been frozen can be an embarrassing situation, but for some people, it can be downright scary as they can’t withdraw money to pay their bills, rent, or to even buy food.

If you have discovered your bank account has been frozen, please call us at (888) 801-7765 to schedule a free consultation. Many times the banks themselves don’t understand or follow the laws put into place to protect consumers from having their bank accounts frozen. 

Our New York frozen bank account lawyers can help. Contact us online or call (888) 801-7765 today.

Understanding Frozen Bank Accounts and Bank Levies

A restrained or “frozen” bank account is a bank account that you cannot take money from because a creditor has directed the bank to hold your money for collection purposes.  When your bank account is frozen, you can put money into it, but you can’t take money out.

Reasons Your Bank Account May Be Frozen

If your bank account has been frozen, that most likely means that a creditor has obtained a judgment against either you or someone you share the bank account with. New York, New Jersey, and Pennsylvania allow creditors to do this so they can put significant pressure on you to pay your debt.

Understanding Negative Balances in Your Account

If you have received a statement or checked your balance online, you may be extremely concerned that a negative balance is being reported. This does not mean that the creditor took all your money and then some to satisfy their judgment. In New York State, creditors are allowed to “freeze” double the amount of the judgment, and this oftentimes makes it appear like you have a negative balance. In the vast majority of cases, the money is still in your account and has only been frozen.

Is Your Money Safe? Understanding Exempt Funds

A New York State law known as the “Exempt Income Protection Act” (or simply the “EIPA”) limits the ability of a creditor to restrain or “freeze,” bank accounts.

Under the EIPA, if your bank determines that you possess $1,950 or less of non-exempt income in any account, that account cannot be frozen. “Exempt” income includes any of the following:

• Supplemental Security Income (SSI)
• Social Security retirement
• Social Security Disability (SSD)
• Public assistance (TANF)
• Income earned while receiving SSI or public assistance
• Disability benefits
• Workers’ compensation benefits
• Veterans’ benefits
• Black lung benefits
• Spousal support, maintenance (alimony), or child support
• Railroad retirement
• Unemployment benefits

If no exempt funds can be identified in the bank account, any amount over the $1,950 that is present in your account can be frozen.

If your bank determines that some of the money in your account contains exempt funds, then the cut-off amount is raised to $2,660. This means that if you have less than $2,660 of exempt and non-exempt income in your account, then there will be no freeze whatsoever, but anything above the $2,660 can be frozen.

In New Jersey and Pennsylvania, the law is different, but some of these same protections exist there as well.