Can a collection agency freeze your bank account if there was no prior notice on money owed? 16 Answers as of August 10, 2011

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.

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
You were probably served and jmt was granted because you didn't respond. Bankruptcy will stop the collection and depending on the amount, you might be able to get it back.
Answer Applies to: Washington
Replied: 8/10/2011
Eric J. Benzer, Attorney at Law
Eric J. Benzer, Attorney at Law | Eric Benzer
Yes, hire attorney
Answer Applies to: Maryland
Replied: 8/6/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
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.
Answer Applies to: Virginia
Replied: 8/4/2011
Law Office of John C. Farrell, Jr.
Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
You should have received notice prior to this in some form that you owed money and/or that a lawsuit has been filed against you. The reason why a law firm is involved is because the creditor hired it to go after the money it is owed. Upon filing suit the creditor can go forward with an ExParte Motion to Attach you bank account. The lawyer for the creditor would have to prove that if given prior notice a debtor would withdraw the funds. In doing this you as the defendant debtor are not present for the approval of the motion. That being said, there are some things you can do. With respect to a bank account, Massachusetts law protects or exempts $500 from attachment. This amount is aggregate and not dependent on the amount in each account. Therefore, the bank you have the money held with is attached should be aware that the first $500 is exempt and can only pay out to the creditor any amount above this. The bank is given notice of this and you should be on top of this. When you go to court you can state this in court if the $500 exemption was not adhered to.
Answer Applies to: Massachusetts
Replied: 8/3/2011
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
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.
Answer Applies to: California
Replied: 8/3/2011
    Ryan Legal Services, Inc.
    Ryan Legal Services, Inc. | Kevin Ryan
    Not unless they have filed a civil action and FIRST successfully obtained a valid Court Judgment against you. Once they have a judgment they can search out and seize bank account funds in the Debtor's name to pay the judgment. A bankruptcy filing Stops that immediately (See, Title 11 United States Code, Section 362)
    Answer Applies to: Ohio
    Replied: 8/3/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    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.
    Answer Applies to: California
    Replied: 8/3/2011
    Answer Applies to: California
    Replied: 8/3/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    The creditor must have a judgment against you or they would not have the authority to levy on your bank accounts. Bankruptcy would erase this debt.
    Answer Applies to: California
    Replied: 8/3/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Sounds like a "pre-judgement attachment." You need to see a lawyer ASAP. Getting another account is a good idea, but I have not seen the court order. It may prohibit you from doing that.
    Answer Applies to: California
    Replied: 8/3/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    Prejudgment seizures do exist under certain circumstances but they are extremely rare. Have you contacted your bank to determine the nature of the hold? If your funds are frozen by the creditor, you should immediately make an appointment with an attorney to discuss your options.
    Answer Applies to: Alabama
    Replied: 8/3/2011
    Ashman Law Office
    Ashman Law Office | 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).
    Answer Applies to: Georgia
    Replied: 8/3/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    It sounds like you are being sued, but in the mean time, before the creditor has obtained a judgment on the lawsuit they have frozen your bank account. That is one possibility... the other possibility is that you were already sued and they obtained a judgment and are now enforcing it. If that's the case, the court date could be a status/ show cause date at this point. Check the name of the creditor and the institution where you bank. If it's the same entity, then it's quite possible that they levied your bank account without having first obtained a judgment. When you owe money to the same entity where you bank, then this is a possibility for the creditor to pay themselves on the debt you owe to them. If it's not the same creditor (be sure to look at the creditor name, not the collection company name), then they had to have first obtained a judgment against you in order to freeze your bank account. Any money you have in the account is fair game for them to take, unless you are on a fixed income. Switching your bank account may not be the best course of action to take if they have a judgment because they will likely find you wherever you end up banking.
    Answer Applies to: California
    Replied: 8/3/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    You need to review the court file and find out what happened. There was prior notice that you owed the money. The garnishment is evidence that the creditor told the court that you were served with court papers adn the court issued a judgment against you. Without a judgment, the court would not have authorized the garnishment. If you were not property served, you can get the judgment overturned, but you will need to review the court file to determine what evidence of service was presented.
    Answer Applies to: Colorado
    Replied: 8/3/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Switch banks and keep all money out of banks until you file for BK.
    Answer Applies to: California
    Replied: 8/3/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    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.
    Answer Applies to: Michigan
    Replied: 8/3/2011
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