Frozen Bank Account

How long does it take for an out-of-state judgment-creditor to freeze a bank account?

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Bill's Answer: Answered by Mark Cappel

My answer assumes your judgment was from a court in your former state and not your new state.

Although no one can guarantee you a specific amount of time before the judgment creditor in question attempts to freeze your bank account, I would expect that upon opening a new account in a new state, you would have at least a few months before you need to worry about the creditor taking such action.  

The primary reason for the delay in your case is your change of residence to a different state. Were you still residing in your former state (New York), the creditor would likely be able to freeze your new bank account quickly.  However, because your new account will be opened in your new state of residence (North Carolina), and the creditor's judgment was entered in your old state, the creditor would be required to file a motion with the local courts in your new county of residence seeking to domesticate its judgment. Once domesticated in your new home state, the judgment would be enforceable as if it had been granted by your new state's court, and the creditor would be able to freeze your bank account, garnish your wages, place a lien on your property located in your new state, etc., just like any other judgment creditor.

Although it is possible the judgment-creditor may file for domestication of its judgment in your new state of residence, and subsequently seek to levy your new bank account, many creditors choose not to pursue this course of action, as it can be a costly endeavor and often does not improve their ability to collect.  The reason is that the creditor would need to file its motion for domestication before it knows whether you own any assets in your new state that can satisfy the judgment.  Your new bank or credit union will not notify the creditor you opened a new account, so it will be up to the creditor to try to find where you are now banking. This is a difficult task for any creditor, especially if you are banking with a relatively small bank or credit union and have not paid the creditor from the new account.  Although I advise you to be careful about using the new account while you have an outstanding judgment against you, I would be surprised if this creditor will take action against your new account for a long time, if ever.

To learn more about your rights as in the collections process, see the resource Collections Advice.

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Comments (22)

James J.
Nanticoke, PA  |  January 25, 2014
I live in PA and got a judgment from NY over that northern leasing systems inc. I am disabled and couldn't travel to New York. What happens now? I told them in a letter that it was past the statute of limitations which was 4 years on a 8 yr old debt. Also had no way to get to New York.
January 27, 2014
Consult with a Pennsylvania lawyer to discuss your options to respond to the judgment, and if you have any grounds to file an appeal and motion to vacate the judgment.
Anna C.
Lawrence, NY  |  October 20, 2013
I have a judgment against me in NY state. Under the Exempt Income Protection Act (EIPA) in New York, they can not freeze my account if I have less than $1,740 in the bank. If I move out of state but continue to use my NY account can they touch it? Or will it still be safe in NY even if I'm not an NY resident?
October 21, 2013
EIPA applies to New York residents. The law currently exempts $2,625, if a New Yorker's account contains directly deposited exempt benefits, such as Social Security, Veterans benefits, disability, pensions and child support. It exempts $1,740 for all other accounts.

The law does not apply to residents in other states. If you move to another state, EIPA no longer applies to you. Instead, your new state's collection laws apply.
Rick J.
Hampton, GA  |  February 02, 2013
We live in Georgia. My daughter has a judgement against her for an old credit card debt. Yesterday a garnishment was placed on her bank account. She is a single mother, not working, going to college full time. The monies in her bank account are from child support and student loan proceeds, a bank representative told her she could file a petition and show that the monies were not from wages but from child support & student loans and get the funds released, other articles I have read have stated that in Georgia all monies can be garnished, regardless of their source. Can you shed some light please?
February 05, 2013
Consult with a Georgia lawyer who has consumer law or bankruptcy experience about this matter immediately. In particular, ask the Georgia lawyer if the exemptions listed in Georgia § 44-13-1 apply to your daughter's situation. I interpret § 44-13-1 to mean its exemptions apply to judgments, but a I hasten to add I am not a Georgia lawyer.
Gabriela R.
Teaneck, NJ  |  December 01, 2011
I Live in NJ. I got a Bank Levy about 3 months ago. As soon as it happened I Called The Law Firm and arranged a payment plan. I have payed for 2 months already and on time, yet I just got a Levy from the same law firm yesterday. Apparently they forgot to notify the court that I'm on a payment plan. Is this Legal? Can I get my money back? I have payed $325 every 14th of the Month and the Payment is due the 17th. I don't get it. They took my mortgage money which went in right after the Levy and now my account is showing -$1,800.00.
December 03, 2011
As I am not a lawyer I can not give you legal advice or a legal opinion, but will share a few thoughts with you.

Do you have a written agreement with the law firm? If so, ask them why they are still placing a levy on the bank account when you are making payment. If you have no written agreement, it is harder to prove that the law firm is acting in bad faith. It think it is wise for you to seek some legal advice.

A separate issue is the negative balance in your bank account. Speak with you bank and cancel any overdraft programs, such as overdraft protection. It is wise not to have money in any account, which can be levied, and certainly you do not wish to be in overdraft.
Robert M.
Massapequa Park, NY  |  October 19, 2011
I moved from North Carolina to New York. I have charge offs from NC and The statue of limitaions is less for NC then NY. Its three years for NC and six years for NY. Can they tack on the extra three years, now that I'm living in NY?
October 19, 2011
See the resource Statute of Limitations for a discussion of this tricky issue. Ask any follow-up questions you may have on that page.
Chris O.
Abilene, TX  |  September 21, 2011
I was called from an unknown number and was left a message to call a firm with a complaint filed against me with a number and case number. I called the number and they would not identify the office or company and would not answer any question until i verified some information. After the information was verified he mentioned a name that I did not get and would not repeat and said that I would receive a summon then hung up. I called back again and the man said "we already talked" and hung up. Do collectors contact before filing?
September 21, 2011
If a creditor or collector has your proper address you should receive notice of any prospective legal action.

What information did you give out, when you 'verified some information'? I am concerned that, if this debt is not legitimate, that you may have opened yourself up to identity theft, if you gave out your social security number and other private information. The collector's behavior that you described does not seem normal.
Debbie G.
Finley, CA  |  May 04, 2011
I have a judgment in CA and they got permissin to levy my bank account. We went to court over a year ago and they have not touched my bank accounts. Can they still levy on them after all this time?
May 04, 2011
See the resource California Collection Laws to learn the statute of limitations for judgments.
James B.
Rochester Hills, MI  |  February 21, 2011
Can a court enforce a bank levy on an international bank account?
February 21, 2011
Your question may appear simple, but it plunges headlong into the center of an area of law called civil procedure. No civil procedure question is simple, and answers are filled with caveats.

The answer to your question is yes, if the court has jurisdiction over that bank and no if the court does not. A court has jurisdiction over a party if the party is present in the court's area of jurisdiction and the subject matter is one the court is allowed to hear. This paragraph is an extremely abbreviated discussion of jurisdiction rules.

If the international bank is, for example, HSBC, which has a US presence, the answer to your question is maybe if HSBC has offices in your state. If the bank is, for example, Attijariwafa Bank, which is a bank in Morocco with no US presence, the answer to your question is no. Probably. If the amount in question is large, you would be wise to consult a lawyer with civil litigation experience, who can analyze your situation in detail.
Susan J.
Concord, NC  |  January 24, 2011
I live in North Carolina and recently had a judgment put on me for credit card debt. The judgment was in my name only. My husband was not named in the judgment although the delinquent account is on his credit report and he is an authorized user of the card.When the banks accounts get levied can the credit card companies take money out of our joint account and accounts in his name only? He is the only wage earner. I am unemployed.And can they attach liens to jointly owned property such as our home?
January 24, 2011
If your husband is not named on the judgment, then he will not have his wages garnished or his individually held bank accounts levied. Any bank account that has your name and social security number on it could be levied. If a lien is filed against you, it will affect any property you own, whether jointly or on your own. You won't be able to sell your home or refinance the loan on your home, while the lien in place, unless you pay off the debt. It is important to remember that even after judgment, the debt continues to accrue interest. The rate of interest varies from state to state. In North Carolina there is an 8% interest rate that applies post-judgment. Lastly, the number of years that a judgment remains enforceable varies from state to state. In North Carolina, the judgment is enforceable for 10 years.
Ellie G.
Charlotte, NC  |  January 19, 2011
Hi Bill - My situation is almost identical to the first one ---with an unfortunate twist. I moved to NC from NY a few months ago. Once in NC, I opened a bank account with Wachovia. During the holidays, I was shocked to discover out that some debt collection firm based in NY had my account levied on a NY default judgment. I was able to obtain a copy of the order from the bank, and it specifically states NY ASSET. Obviously my NC bank account is not a NY Asset. Also, from what I understand, NC requires domesticating of foreign judgments, which was not done. Furthermore, the judgment bears my maiden name which I have not used in ages and my old NY address. It seems that Wachovia may have violated NC laws by honoring this never-domesticated NY judgment on a NC bank account. Can I write to Wachovia and point these issues to them? Or what can I do to get a NC to overturn that levy? Like what form can I use? Thank you so much for your insights.
January 19, 2011
North Carolina follows the Uniform Enforcement of Foreign Judgments Act (N.C. Gen. Stat. 1C-1701 et seq), which is explained in general terms in the original answer above. It baffles me that a bank the size of Wachovia would make the blunder you described. Unfortunately, there is no form or simple fix, other than if you call Wachovia's customer service center and find a sympathetic customer service representative who can unfreeze your account. Otherwise, you must find a lawyer who will fire off a letter immediately to Wachovia demanding it unfreeze the account, and then file some form of emergency motion with the North Carolina court placing a temporary restraining order on Wachovia that prevents it from freezing your account while the issue of the non-domesticated judgment is decided. I wish you well in resolving this issue.
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