bank account freeze

[jmille1207]

What is the name of your state? Kentucky

This morning my bank accounts were frozen as a result of a judgement against me some time ago. My question relates to this: my son's disability payments as well as my child support are deposited into that account. It is my understanding that those funds are exempt. How do I go about getting those funds back to where I can access them?

 

[Debt Guy]

You file a motion with the court to have the funds returned on the basis that the funds are exempt from levy. The court clerk can show you a sample of a motion.

This is not a fast process and usually takes 30 to 90 days. Just another reason to never ignore a lawsuit or judgment.

 

[Chien]

I normally agree with Debt Guy and I do in this instance as well. But there may be one additional thing worth trying.

You don’t say what proportion of the seized funds the exempt funds comprise or how critical is your need to access them (and you don’t need to). If it’s critical, it may be worth your time to contact the attorney who initiated the levy and discuss the situation. Courts try to expedite exemption hearings, but the funds could be beyond your reach for some time. I would hope it would not be 90 days, but 30-45 is not unrealistic, so it behooves you to also start the exemption process as soon as possible.

However, banks normally hold frozen funds for a period of time to determine if there are going to be any claims that take precedence to those of the judgment creditor. In my state, it’s 10 days. After that, they’re released to the levying authority, which also holds them to see if there will be a claim of exemption and, if so, the outcome. In my state, that’s another 30 days.

But the attorney can direct the bank or the levying authority (Sheriff/Marshal) to release all or part of the funds at any time, and only the attorney for the judgment creditor can do this. If you can prove that some or all of the funds will be found to be exempt and there is a need to access those funds before an exemption hearing can be scheduled, the attorney might be willing to issue such a release.

Understand that this is not a legal tactic that substitutes for your claim of exemption (which may even cover more than the disability and support funds); it is a reasonable and compassionate response to a problem, and the attorney must agree and initiate it. In return, he/she might want to set up a payment plan, if possible for you, but that’s a separate matter.

Just know that it’s possible, but the judgment creditor must agree and initiate. With a client’s permission, I’ve even released non-exempt funds for medical emergencies. The creditor just wants to be paid. It’s not necessarily heartless.

Good luck if you try.

 

[BL]

Just for added protection , I'd supply your bank with copies of the Laws whereas your funds are exempt from seizer , and request them not to release any of them , and to work with you on lifting the freeze .

 

[Chien]

Just for added protection , I'd supply your bank with copies of the Laws whereas your funds are exempt from seizer , and request them not to release any of them

It's a nice idea, but the levy is a court order, and the bank can't do anything but comply fully, until it gets a court's ruling that some or all of the funds are exempt.

 

[Debt Guy]

Some states allow the debtor to "file their exemptions". This would be a filing with the court that outlines what assets are exempt from levy or attachment. You would provide a copy of that filing to the attorney for the creditor. In theory, the creditor is now on notice of what assets are exempt and should not petition the court to grant an order concerning those assets.

Call the courthouse and speak to the court clerk. Ask about filing exemptions.

 

[jmille1207]

re:

thank you all for your advice and insight. As a side note, I had not completely ignored the judgement. There have been payments made in the past, but as a single mom of three kids, one of whom is disabled, sometimes it is difficult to fully cooperate.
I did contact the lawyer's office that initiated the levy yesterday, but they were quite rude and told me to contact an attorney that I was wasting their time.
thanks again.

 

[Chien]

Ok, some SOBs are heartless. I'm sorry.
DG is right. Your first step will be to compile and file some form of what amounts to a financial statement basically showing your income, the source(s) of income and your expenses.
Can you prove the origin of the funds you're attempting to salvage and do you have that evidence now? Just a yes or no will suffice. Maybe it's possible to still make inroads where you didn't.
How much of what is owed is now frozen? (No figures are necessary - "all, a small bit, a large piece" is all I'm looking for.)
If some payments were made and then some missed because of circumstances that arose, did you have an agreed payment plan, and did the missed payments amount to a default on that agreement? If so, could you confidently commit to a new plan that involved smaller payments over a longer period of time? Would you want it?
If you think you could comply with a new agreement, post back, if you want to try to renegotiate and need some help. DG's thoughts about providing the attorney with your list of exemptions is fine, because he/she is going to get it in advance of the exemption hearing anyway.
You're going to salvage the exempt funds, but also post back if you have questions about the process.

 

[jmille1207]

re:

I can prove the origin of the exempt funds by way of an award letter from the social security administration as well as court documents for the child support. If that is not enough, what else do I need? Also, my paychecks were direct deposited into that account. How do you differentiate the funds?
The amount of the judgement was around $3500. But, because of the continual accrual of 22% interest and a 15% attorney fee, even with the amounts that have been paid, (which was by way of wage garnishment) it is now around $10k. The wage garnishment ended because my son was hospitalized for over a month and I had to leave my job. My main focus has been to finish my degree and I just started my last round of classes, but I do have another job now and I guess I was somewhat waiting for them to garnish my wages again.
Anyway, the amount they have frozen is definately less than what I owe, and I have no problem with them taking what is in my savings account, which is from a tax refund. The amount in my checking though I really do need to survive. The portion that I believe is exempt is only about 20% of the total that they have frozen.
I am definitely interested in renegotiating and could confidently commit to payments, but they don't seem to want to work with me.
I am a bit confused about the process. The only letter or notification I have received was a letter that I received yesterday from the bank that said they were ordered to freeze my accounts. The only number for contact on the paper was the same number that I have for the attorney's office that has the judgement. In some documents I have about debtors rights it says that you are supposed to get a letter with instructions on what to do but I have not received anything like that.

 

[Chien]

(Sorry - problems with my ISP - they hiccup and an office may as well hibernate.)

I've opened up PM. Contact me that way. I'll want to know what you were paying before, what you could resume paying regularly, if you could make some kind of a "catch-up" payment from savings (but don't stretch yourself too thin) and the $ amount of the frozen funds that you can prove are exempt. Did you try to claim exemptions when they did the earlier wage garnishment, and do you know what your exemptions would be, if they started a new one? (Do they even know where you're working?)

That may lead to more questions, but we'll start there. I'll also want to know who you're dealing with and how to reach them by telephone.

We have a time differential and I can make no promises but, if you want to try, get in contact.

 

[jmille1207]

re: Chien

ok, you'll have to forgive me, but this is the first time I have had to use this forum and I have no idea what you mean by the PM. I'm assuming it is a private message but I have no idea where to go to find it on here.

 

[Chien]

Don't worry. I know the feeling. Just make sure you've opened the PM option for yourself as well. I've sent you an email address to use. Post back here, if you have problems.