The e-mail packed with desperation. The potential client had a judgment slapped against them by one of their creditors and, in this case, their assets were in jeopardy and their bank accounts were a target. They wanted to know if there was anything I could do to help them. They were scared and desperate. That’s when I told them about putting a freeze on a freeze.
Bankruptcy can freeze a freeze
In certain circumstances, such as this one, creditors can freeze bank accounts and seize the money. That’s what happened here. Depending on the financial situation and which route is best for the case, filing a Chapter 7 or Chapter 13 bankruptcy will put a freeze on the freeze. Once the creditor finds out about the bankruptcy, that stops any collection process, including the freezing and removal of money from a bank account.
I don’t have to tell you what a mess you will be in if your accounts are frozen. Food, gasoline, automatic payments, and checks sent out to pay bills could suddenly be at risk. And, to be frank, it is very difficult to pay your attorney in those situations, so it’s best to avoid this from happening.
Read all of your mail
How do you do that? Don’t ignore notices that say you are to appear in Court, even a District Magistrate court. Talk to an attorney as soon as you get the notice to go over your options. If, at the District Court, your creditor gets an award (that means they win), you have 30 days to appeal or pay. If you hadn’t talked with an attorney before the hearing, see one now.
Be aware of the authority you have given to your creditors to take money out of your bank account. If you owe money to the bank where you have the account, you can expect them to take money out of your account if you are delinquent.
After the bankruptcy is filed, in most cases, we can get the money back that has been taken from your bank account. It may become necessary for us to file a motion with the Bankruptcy Court in order to accomplish this, but most often, the creditor will release the freeze and the money without our having to go to Court.
As soon as you sense that you are in some financial trouble, contact Steidl and Steinberg. We will meet with you for a free consultation and work with you to outline your options.