QUESTION
Can a collection agency freeze your bank account if there was no prior notice on money owed?
Asked on Aug 01st, 2011 on Bankruptcy - Michigan
More details to this question:
I received a letter from the superior court about money owed to a collection agency with a court date if I wanted to fight it, but the court date isn't for another month, but my bank account has already been frozen. What can I do? Do I open another bank account and have my money deposited in a new account, so it my future money won't be frozen? Do I file bankruptcy? In the meantime my bills aren't being paid because of the frozen account.
5 ANSWERS
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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You could open another account, maybe, but all banks will have notice of this freeze. The Summons may have been a garnishment summons, in which case they are entitled to freeze it. Not fair, but they are entitled. So file bankruptcy before the Hearing date and your lawyer can get your money back.
Answered on Aug 04th, 2011 at 12:09 PM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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The collection agency cannot freeze a bank account. Once the collection agency gets a judgment then it can levy the funds in the account. If you did not respond to the summons and complaint served on you within 30 days then the collection agency can get a judgment against you by default and levy the funds in your account. Therefore, if it was that collection agency that levied your funds then it must already have a judgment from the court because you did not answer the complaint (lawsuit) within 30 days. Banks and credit unions can also take money from your account if you have a loan with the same bank or credit union to which you owe money. That is called a set off (they pay themselves from the funds in the account). You need to stop putting money in the same account and talk to a bankruptcy attorney about that option to discharge your debts and end the lawsuit.
Answered on Aug 03rd, 2011 at 12:51 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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If you file bankruptcy the collection agency will have to release the hold on your bank account. You probably should open another bank account and have your money deposited in a new account, so future money won't be frozen.
Answered on Aug 03rd, 2011 at 9:17 AM
Glen Edward Ashman
To freeze an account you are either in a garnishment or they obtained a court order. It sounds like you may have already messed up in not having a lawyer. A court date will not matter if you do not file proper answers, counterclaims and defenses. Did you? (Get a lawyer. Hopefully you were served less than 30 days ago and didn't wait too long).
Answered on Aug 03rd, 2011 at 8:18 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Collection agencies are not attorneys and only attorneys can represent another entity in court to employ a judicial seizure of a bank account. Usually a judgment must be obtained against you for an attorney to employ a judicial process to seize a bank account. A bankruptcy will usually free the bank account.
Answered on Aug 03rd, 2011 at 8:12 AM