Start My Answer

Can a Debt Collector Freeze Your Bank Account?

Chloe Meltzer | December 12, 2023

Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Were you sued for an old debt and had a judgment placed against you? If you're worried about having a debt collector freeze your bank account, find out what you can do about it.

Having your bank account frozen means that although your funds exist, you cannot access them. If you owe a credit card debt or loan, a debt collector has no right to freeze your bank account until they obtain a court judgment against you. Debt collectors see freezing your bank account as a way of pressuring you into paying off your debt, and sometimes it works.

Your Bank Account Might Have a Large Negative Balance

After a judgment creditor puts a hold on your bank account, you may notice that you have a hugely negative balance. This is because the debt collector can legally charge you for twice the amount of the judgment against you. Although you do not owe this all, it will show up as a negative balance.

Avoid frozen bank accounts by filing a response with SoloSuit.

Your Bank is Not Required to Notify You Beforehand

Unfortunately, you may receive no notice before your account is frozen. This is because the judgment acts as a notice to freeze your account immediately. You may even find out that your bank account is frozen while trying to pull money from an ATM or use a debit card.

Avoid Having Your Bank Account Frozen by a Debt Collector

Both your bank and the judgment creditor do not need to give you specific notice when freezing your bank account, but there are ways to avoid having your account frozen.

  1. The debt collector will notify you when the first lawsuit is placed against you. This means that you will have time to respond to avoid the judgment.
    1. You will again be noticed when they have obtained a judgment against you. Your first notice of the court case should not be a frozen bank account. In this case, something went wrong, or you have not received proper notice. You may be able to fight this.

Respond to debt collectors in 15 minutes with SoloSuit.

Unfreeze Your Bank Account After a Judgment

The best way to unfreeze your bank account is to remove the judgment against you. There are only three ways to remove a judgment against you, either by vacating it, satisfying it, or discharging it. Vacating the judgment is your best option as this will immediately release the freeze.

Vacate the Judgment to Unfreeze Your Bank Account

Some cases do not allow you to vacate a judgment against you. If you answered a lawsuit and the court entered the judgment against you, there is a rare chance it will happen. Despite this, if you were given a default judgment (meaning you did not answer the summons), then you may have the option to vacate. Different states have different laws, but most often you must file a motion with the court asking the judge to vacate the judgment.

Satisfy the Judgment to Free Up Your Funds

By satisfying a judgment you are essentially paying it off. Oftentimes you can end up settling the judgment for less than the full balance that you owe. If you do seek to settle a judgment, ensure that the entire judgment is considered settled, and ask for written proof.

Discharge the Judgment Through Bankruptcy

Essentially the only way that a judgment can be discharged is through bankruptcy. This should never be your first choice, but if you are suffering from other forms of financial hardship and you have explored all other avenues then it can be an option.

Negotiate a Settlement Without Going to Court

There are a few cases where you may not need to negotiate a settlement to unfreeze your account. If your account contains any form of exempt benefits or retirement benefits, then you will not need to go to court. Exempt benefits include:

  • Public Assistance (PA)
  • Supplemental Security Income (SSI)
  • Social Security
  • Social Security Disability (SSD)
  • Veterans benefits (VA)
  • Child Support
  • Spousal Maintenance
  • Workers Compensation
  • Unemployment Insurance
  • Railroad Retirement benefits
  • Black Lung benefits

If your bank account contains recent wages or nonexempt funds, then you most likely will need to go to court. You most likely will be able to negotiate much better in court versus out of court. This will allow you to vacate the judgment if possible.

Use SoloSuit to respond to creditors and debt collection agencies fast.

Reasons to Petition a Vacate of Judgment

Unpaid judgments can be collected within the statute of limitations which is typically up to 20 years. Not only do unpaid judgments allow your bank account to be frozen, but they can also allow debt collectors to garnish your wages.

On top of that, judgments also appear on your credit report. This may affect your ability to obtain loans, housing, and even employment. Typically it is always best to vacate the judgment if possible.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Start My Answer

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources