Bank Account Frozen in Illinois
Bank accounts are frozen for a variety of reasons such as suspicious and illegal activity, but are most commonly frozen due to unpaid debts. In these situations, the debtor generally owes the government or an independent creditor a substantial sum. A bank account can be frozen as a result of pursued legal action against the debtor. Also known as a bank levy, garnishment, or attachment, a frozen bank account can have a noticeable effect on immediate funds. Outstanding checks will not clear, bank charges can accumulate, and any direct deposit funds may be frozen as well.
A creditor seeking collection of an unpaid debt can pursue a court judgment. Once the judge issues a decision, the debtor is notified and must respond in some fashion. If the individual fails to take the necessary steps to satisfy the judgment or devise a payment plan, a creditor can request a court issue. The court issue instructs the bank of the debtor to freeze the account until further notice. It is vital that the afflicted debtor contact an Illinois frozen bank account attorney to discuss his or her legal options.
It is possible that not all funds in a frozen bank account will be inaccessible. The bank can freeze up to twice the amount detailed in the garnishment. If this sum does not exceed the debtor’s balance, he or she can still access the remainder of the funds. Certain funds are protected and cannot be legally frozen:
- Unemployment compensation
- Social Security
- Disability benefits
- Wrongful death award
- Public assistance benefits
- Personal injury awards of less than $15,000
Banks are required to provide the account holders with a notice of the garnishment; however, it is likely that the account will be frozen by the time the debtor receives the notice. Any personal or direct deposits into the bank account might be frozen as well if the original amount was insufficient.
A frozen bank account does not only deny you of immediate funds. It affects any other payments attached to that account. Many people have their cell phone, electric, and other monthly payments automatically withdrawn from their checking accounts. These bills will go unpaid as long as the account is frozen.
Unfreezing an Illinois Bank Account
There are a few options in unfreezing a bank account. One of these is to inform the bank and creditor of funds that may be exempt from garnishment under state law. The debtor must file a paper with the court identifying the particular debt he or she is claiming as well as the qualifying funds. Another option is to set up a payment plan. Many creditors will release the levy if a payment plan is agreed upon and initiated.
The process of unfreezing a bank account can be tedious and require extensive legal knowledge. An Illinois frozen bank account attorney can help the afflicted debtor regain access to their funds. Heather Benveniste worked as collection attorney for seven years and today uses her unique inside knowledge to negotiate with creditors on her clients’ behalf. Allow her to work for you! Contact Benveniste Law Offices today at 1-800-497-5358 for a free case evaluation.