If a creditor freezes your bank account, the creditor must mail you a notice of your rights to appear in court and contest the freeze. The notice must tell you the date, time, and place the case is to be heard in court. This is called a return date.
On the return date, a judge will decide whether your bank should turn the money in your account over to the creditor.
Which funds in my bank account are protected?
The law protects certain types of income or property from a collection company. Income and property that the creditor cannot touch are called exemptions. The following is a list of the most common exemptions:
- $4,000 of value in personal property of the debtor's choice, including money in a bank account (this is called the "wildcard" exemption because it can cover so many things)
- Social Security & SSI
- Note: even before you claim an exemption, the bank must not freeze any Social Security benefits that were directly deposited into the bank account within the last two months
- Unemployment Compensation
- Public Assistance benefits
- Veteran’s benefits
- Child support or maintenance needed for support of you or your family
- Pension and most types of retirement benefits
- Disability, illness, or unemployment benefits
- Award under a crime victim’s compensation law
- Wrongful death award needed for your support
- $15,000 or less of a personal injury award
Learn more about Money and property a debtor can protect from collection.
Getting access to your funds
If a creditor freezes your bank account, you should first inform the bank and the creditor if any money in the account is approved for an exemption. You also need to go to court to claim the exemption.
Even if the bank agrees to remove the freeze on your account, you should still go to court on the return date to make sure that the freeze is lifted and that the bank is ordered to return your money to you.
You do not have to wait for the return date for the notice of rights to claim an exemption. You may make an exemption claim at any time. To do this, file a motion to release the citation to access your exempted funds.
Learn more about Preparing, filing, and presenting motions in court.
Updated: November 2017