We often receive inquiries from people living in New York, Queens, Bronx, and Brooklyn that a collector or collection agency has frozen their bank account, and wondering what they should do.
Collectors and collection agencies can’t freeze bank accounts. They have only two tools in their tool belts: letters and calls. However, in New York lawyers can and do freeze bank accounts. The way they do that is to get a judgment on behalf of their creditor client and then issue a restraining notice. Large collection law firms routinely issue restraining notices electronically to all the major banks.
A bank that receives a restraining notice is required to freeze 2x the amount of the judgment. A restraint pursuant to a restraining notice is good for one year, unless the judgment is satisfied or vacated. A judgment creditor, through its attorneys can instruct a marshal or sheriff to levy a writ of execution against the restrained account (and take the money out to satisfy the judgment).
My law firm, Starr & Starr, PLLC, represents people in unfreezing bank accounts. However, it usually doesn’t make economic sense to hire us unless the judgment is fairly large (such as $10,000 or more). In a prior post we discussed ways a judgment can be set aside through an order to show cause or personal bankruptcy.