Why Did the Bank Freeze My Checking Account?

There are several reasons a bank account can be frozen. To find out why an account was frozen, you should contact the bank directly. Some background information can help you avoid account freezes.

  1. Creditors

    • According to MFY Legal Services, a plaintiff who filed a case against a debtor and won can legally freeze an account to collect funds by filing proper paper work through legal channels.

    Debt Collection

    • According to the New York Department of Consumer Affairs, debt collection was their number one complaint in 2008, increasing nearly 70 percent from 2007.

    Rights

    • If you have not been served with a warrant or subpoena, your bank account should not have been frozen.

    Law Enforcement

    • If police or law enforcement believe funds were obtained illegally or are intended to be used in a crime, they can have a judge sign a warrant seizing those funds.

    Exemptions

    • Several sources of income are exempt from seizure, such as Social Security payments and veteran's benefits. Additionally, the new Exempt Income Protection Act of 2008 in New York makes it illegal to seize funds below $1,740.

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