Posted on June 7, 2009 at 11:07 pm Is it possible for debt collectors to freeze my bank account without my knowledge? I owe quite a hefty sum of money from different creditors and I wish to take care of these bills. Unfortunately my means are not sufficient to cover my debts. I'm just wondering if this can be done. I do not want them to tamper into my personal affairs. Hope someone can answer. Thank you

Posted on June 8, 2009 at 12:13 am A debt collector should have a judgment against you before they can gain access to your bank account. Your creditor needs to inform you in advance that certain assets from you--whether it's your property or your wages--may be garnished. It's possible that they can freeze your account, if only for this purpose.

Posted on June 8, 2009 at 12:26 am Debt Free Wannabe, it is entirely possible for a debt collection agency to freeze bank accounts only if they receive notification from your creditor. Typically the funds that they freeze on your account are those that aren't exempt from collection. Keep in mind that when an account is frozen, you won't be able to withdraw the money or use the resources to pay checks. You may want to inform your bank and the debt collector in writing if the funds in your bank account are exempt or not.

Posted on June 8, 2009 at 12:32 am Could you fill me in on the process, please? How would I know which funds are exempt, too? I hope you understand that I also have to take care of utilities and my children's needs and such. I am a single mother and work very limited hours.

Posted on June 8, 2009 at 4:29 am Exemptions include the following:* Government benefits, including Social Security, veterans' benefits, public assistance, unemployment insurance* Alimony / child support* Other payments that serve as support for dependents* A specific percentage of earned wages that varies by state* Workman's compensation* Disability or unemployment benefits from your employer [which is different from govt benefits]* Proceeds of sale of property exempt from collection [i.e. homestead exemption]* Retirement benefits* Proceeds of guaranteed student loans* Payments from personal bodily injury [$ amnt depends per state]* Life insurance beneftsCertain wildcard exemptions also apply depending on each state

Posted on June 8, 2009 at 5:14 am Of course, the debt collector needs to have a court judgment against you before they can seize or garnish funds from your account. When your bank receives word from the debt collection agency on this fact, they, in turn, will freeze funds in your account that are not exempt from their collection activities. If your bank or debt collector informs you that your account's been frozen, you may notify them in writing that certain funds may be exempt from the account freeze. I'm seeing that Caffeinatrix has provided an exhaustive list on the matter, so pretty much the items listed above will be exempted. You also need to provide enough evidence that funds in a certain account are exempt. However if exempt and non-exempt funds are "comminged" or combined together in one account, it may be much harder for you to prove which resources are included in the exemption or not.

Posted on June 8, 2009 at 7:53 am What plans of action do you suggest I should take in order for my bank account not to be frozen? And, are there any debt relief options that I should consider? Thank you very much.

Posted on June 8, 2009 at 8:03 am Hey, I noticed that you mentioned being a single mom and being hard-up on bills and utilities. I'm sorry to hear about your situation. There are a number of debt relief options, as you call them, that can help in remedying your situation. First you can go for debt settlement which will allow you to settle your loan balance for a smaller amount. You can also go for credit counseling; if your credit counselor sees it fit they may opt to have you enroll in a debt management program. Also, you can try getting a debt consolidation loan. You can get a home equity loan for example and pay off your unsecured debts from the equity that's been saved up on your home.You can fill out a form on DestroyDebt.com and we can match you up with a qualified provider who can handle your financial situation.

Posted on June 8, 2009 at 8:18 am You mentioned that you owed a large sum of money and could not cover the debts with the financial resources that are available to you. Do you mean that you aren't able to make your monthly payments? I am curious because if you are behind on your payments, debt settlement would be a better option for you, especially if you owe a lot. How much exactly is it that you owe? If the debt amount is not that high (under $7-10 K) and you are current on your monthly payments credit counseling may be more appropriate. I think a secured consolidation loan is something you may want to avoid if your financial means are limited at this time. It would be risky to secure the debt with the equity in your home. I see no reason to put your home at risk if there are suitable alternatives. These are important factors for anyone looking for help with their debts to consider before making any decision as to which route they will pursue to find help. If you aren't comfortable sharing the details of your situation I would say filling out a form on the website as cheetoslover mentioned would be your best bet.

Posted on June 8, 2009 at 9:14 am  You can unfreeze your bank account by vacating the judgment. "Vacating" means to erase the judgment that was filed against you. You first need to find out the specific court where the judgment was filed. You need to visit the civil court clerk's office and inform them that you wish to file an "order to show cause" form. From there you need to explain why the judgment needs to be erased. It can either be thru excusable default or a lack of personal jurisdiction.Excusable default can either be having a reasonable excuse to miss the original court date or providing the court with a good defense. A reasonable excuse may mean that you weren't able to receive the summons inviting you to come to court; other reasons that the court may consider as "reasonable" also include being out of town, incarcerated,having an illness, not able to take time off from work, or if the attorneys that you contacted for the plaintiff informed you that you need not show up at court. On the other hand, a good defense, or a meritorious defense, means that you would provide the court with a reason why you do not owe the debt--either thru identity theft or by simply disputing the debt.Having a lack of personal jurisdiction means that you were not properly served with a summons. It also means that you were provided with improper service by the court. An example of this would be the court clerk telling you not to say that you did not receive a summons. You actually have the right to dispute improper service.After filling out the form, have the judge sign this, and you'll have to serve the papers. If the judge chooses not to sign the form, you may seek help to have this filled out accordingly.