What happens when your bank account gets frozen due to outstanding debts?
January 13, 2012 | Bank Careers | No Comments
What do you understand by frozen bank account? A frozen bank account refers to the account, which is officially locked by the bank and you can not access it anymore. When does a bank account get frozen? It mostly happens, when you have outstanding medical bills, bank loans, credit card debts, tax debt, student loan debts or child support debt and you can not pay off this outstanding debts even with the help of an experienced debt management company. If you are experiencing similar situation, and desperately looking for some ways to unfrozen your bank account, the following points might help you out. Though it’s difficult, but it’s possible to unlock your account legally. Read on to know the different ways to unfrozen your bank account.
Exemption
You must be glad to know that a number of funds are exempt from freezing. The list of exempt fund consists of veterans’ benefits, unemployment benefits, 90 percent of your last two month’s income, public assistance, child support and alimony. If you find your bank account is full of exempt funds, contact the creditor and produce proofs of this exemption, so that he can release your accounts. However, few exceptions are there. In terms of child support obligations or defaulted taxes and student loans the rule might vary a little. It’s best to consult an expert local attorney or consumer agency in this regard.
Eliminate Fees
Frozen account means you will be charged insufficient-fund fees which will pile up your payments. However, as per the Federal Trade Commission (FTC), you are always allowed to ask your bank to eliminate the fees, which you have incurred while your account is frozen. Therefore, once you discover your account has been frozen, contact the people to whom you have made payments and ask them to postpone their encashment and then ask your bank to waive the insufficient-funds fees.
Invalidate the Judgment
As soon as you convince the attorney to unfreeze your account, file an Order to Show Cause in order to vacate the Judgment. If you want the judgment to be canceled, then you must know it could be done on several grounds. For example, if its an justifiable default when you have a valid reason for being absent in court and a good defense against the judgment, when there is a lack of jurisdiction which means the court can’t take any legal steps as you were improperly served, and lastly during treachery, distortion of facts and other misdeeds. In order to ensure your exemption order, you have to fill out forms from a local court clerk and once you secure the order, your account could not be frozen any more by the same creditor.
Final thought
Finally, you can accomplish this entire task of unfreezing your account on your own, but it’s always to seek the professional help if an attorney, who can only help you determine whether your funds are exempt but also can assist you get an Order to Show Cause to Vacate the Judgment.