What Is a Frozen Checking Account?


Quick Answer

A frozen checking account is an account through a bank that has restricted the account owner's access because a creditor or judge has placed a freeze on funds and assets. The account owner can deposit money into a frozen account, but money cannot be withdrawn while the account is frozen.

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Full Answer

Creditors or court judgments may freeze accounts for a variety of reasons, such as when payments to credit cards, auto loans, mortgages or student loan debt is severely past due. Creditors, though, cannot freeze checking accounts unless a court judgement has been entered and granted.

When two parties enter into a contested divorce and dispute assets, the courts may also place a freeze on accounts so funds cannot be withdrawn during the court proceedings. The courts, creditors and the bank are not obligated by law, as of 2014, to notify the account holder prior to freezing a checking account. Creditors, though, are obligated to notify debtors when a lawsuit has been filed or when a judgement has been obtained against the account holder, so many debtors do have some notice that an account may be frozen or seized.

When the bank receives the official court notice to freeze accounts, it is obligated by law to freeze the account immediately.

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