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. Whether it’s due to a lawsuit, unpaid debts, or government action, a frozen account can severely impact your financial stability, making it difficult to pay bills, cover living expenses, or access your funds when you need them most.

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 team of New York frozen bank account lawyers understands the complexities of account freezes, whether they result from a legal judgment, creditor action, or tax liens. We are committed to providing proactive legal solutions to unfreeze your account, protect your assets, and help you navigate the process with confidence.

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.

A bank account can be frozen for a variety of reasons, with some of the most common causes including:

• Court Judgment: If a creditor wins a lawsuit against you, they may obtain a court judgment allowing them to freeze your bank account. This is often done to secure payment for an outstanding debt.
• Tax Liens or Levies: The IRS or state tax authorities can place a levy on your bank account to collect overdue taxes. This can result in the freezing of your account until the debt is settled.
• Child Support or Alimony Payments: Unpaid child support or alimony obligations can lead to a bank account freeze, as the government or ex-spouse may seek enforcement through garnishment or other means.
• Debt Collection: Creditors, including collection agencies, may initiate legal action to freeze your account in order to recover unpaid debts.
• Fraud Investigation: In some cases, if fraud is suspected, your bank may freeze your account while an investigation is conducted.

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.

The Consequences of a Frozen Bank Account

A frozen bank account can lead to serious financial consequences, including:

• Inability to Access Funds: You may be unable to access any funds in your account, including savings, salary deposits, or emergency funds.
• Payment Delays: You may miss critical payments, such as bills, rent, or loan obligations, leading to late fees, interest charges, or even further legal action.
• Damage to Credit: If the freeze is the result of a judgment or debt collection effort, it can negatively impact your credit score and overall financial reputation.
• Wage Garnishment or Seizure of Tax Refunds: In some cases, creditors may proceed with wage garnishment or other enforcement actions while your account is frozen, which can further damage your financial standing.

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.

How Can a Frozen Bank Account Lawyer Help You?

If your bank account has been frozen, it can be challenging to know where to turn for help. At Graham & Borgese, we offer comprehensive legal assistance to address your specific situation, including the following services:

• Identify the Cause of the Freeze: The first step in resolving a frozen bank account is understanding the cause. Our attorneys will carefully review the circumstances leading to the freeze and identify whether it’s due to a court judgment, tax issues, or any other reason.
• Negotiate with Creditors and Agencies: Our lawyers can negotiate with creditors, tax authorities, or any other parties involved to secure the release of your frozen funds. We work to find solutions that allow you to resolve your debt obligations without compromising your access to vital financial resources.
• File Motions to Unfreeze the Account: If your account was frozen due to an unjustified or improper legal action, we can file motions with the court to request the release of your funds. We will build a strong case on your behalf, challenging the freeze if we believe it was unlawful.
• Explore Bankruptcy Options: In some cases, filing for bankruptcy may be a solution for addressing frozen bank accounts resulting from overwhelming debts. We can help you explore this option if it’s appropriate for your circumstances.
• Protect Your Assets: If the freeze is the result of a judgment, we work to protect your non-exempt assets and minimize the impact on your financial life. In many cases, certain funds or assets may be protected by law, and we can help you assert these protections.
• Advise on Debt Repayment Solutions: If your account was frozen due to unpaid debts, our team can guide you through debt repayment plans or settlement options to help you regain access to your account and work toward resolving your financial challenges.

How Do I Get My Frozen Bank Account Unfrozen?

There are several potential routes to unfreezing a bank account, depending on the reason for the freeze. Below are some strategies that we might employ to unfreeze your account:

• Negotiate with Creditors or Agencies: Sometimes, creditors or agencies can agree to release the freeze if you set up a payment plan or resolve the debt.
• File a Claim of Exemption: If the funds in your account are exempt from garnishment under New York State law, we can file a claim of exemption with the court to have the freeze lifted.
• Appeal the Freeze: If the bank account freeze was imposed due to a legal error or misapplication of the law, we may be able to appeal the freeze in court.
• Bankruptcy: Filing for bankruptcy can sometimes lead to the release of a frozen account, especially if the freeze is due to overwhelming debt. We can help you understand whether bankruptcy is a viable option for your situation.
• Court Orders: If the freeze was based on a court order, we may be able to request a modification or release of the freeze through the court if you can prove hardship or other mitigating factors.