Can a debt collector freeze my bank account?

Can a debt collector freeze your accounts?  It’s a very common question, and the answer is, unfortunately, yes.  And it can happen years after you thought you swept that car note, mortgage, or other bad debt under the rug.

Generally speaking, before legally garnishing (i.e. “freezing”) a bank account, a lawsuit must have been filed and a judgment must have been entered against you.  While there are certain circumstances where a creditor can attach your property at the very beginning of a lawsuit, it’s much more difficult to get a Court to allow that (and is not the subject of this post).

If there is no judgment against you, and a creditor (or debt collector) has threatened to take money from you, the debt collector may be violating the Fair Debt Collection Practices Act (FDCPA).  Debt collectors are specifically prohibited from making threats to seize, garnish, attach, etc. a debtor’s property or wages unless the debt collector legally has the right to do so.  This is important because, among other reasons, debtors who are subjected to unfair debt collection practices, may be entitled to damages from the creditor under the FDCPA.

Once a creditor has a judgment, things are quite different.

After obtaining a judgment, and waiting a short period after the judgment is entered, a creditor (or debt collector) can start taking steps to enforce its judgment.  This includes garnishing a portion of your wages, seizing money in your accounts, seizing and selling your property, requiring you to produce copious amounts of documents related to your financial condition, and taking your deposition, just to name a few.

Keep in mind that creditors have no obligation to to act on their judgments right away.  Judgments can be periodically renewed (every 6 years in Nevada).  What this means is that if a judgment was previously entered against you, it has been properly renewed, and the debt has not been discharged in a bankruptcy, then the debt collector may be able to seize whatever money is in your bank account now, even after 6, 10, or more years.

The best advice I can give is to pay your bills on time to avoid ever getting into the mire of debt collection.

However, sometimes it’s unavoidable.  If you have been struck by the terrible economy, hard times, medical problems, unemployment, or any of the other myriad of circumstances that make it impossible to keep up with overwhelming bills, you still have options to fight.  Don’t give up just yet and, whatever you do, don’t ignore the problem hoping it will go away.  It won’t.

If you have been contacted by a debt collector, don’t let them intimidate you.  A debt collector’s job is to coerce payment from you and some debt collectors are ruthless about it, but you still have rights after defaulting on your obligations.  Sometimes it’s just a matter of contacting the right attorney to help.

Much love, the #lawyernerd.