Understand Reasons for the Freeze
If you don’t pay your debt to creditors, taxes to state or government tax agencies, or if you file for bankruptcy, your account may be frozen. Getting behind on your child support payments can also result in a frozen account. A creditor must file a lawsuit against you to get a judgment to freeze your account. Once your account is frozen, you will not be able to write checks out of it, get cash or use electronic banking services. Also, any checks you wrote that did not clear before the freeze went into effect will not clear after it takes place.
Review your income sources because some of it might be exempt from being frozen, and you should have access to this money. Exempt funds include payments from Social Security, disability benefits, unemployment, child support and private pensions.
The bank usually reviews your account before freezing it to determine if money is being direct deposited into your account from these exempt sources. If the bank mistakenly freezes these funds, you must request that the money be unfrozen by contacting your creditor’s lawyer –– not your bank –– and explaining the problem. Be prepared to show recent bank statements to prove the money comes from these sources. The creditor must then take action to lift the freeze.
Erase the Judgment
Another way to unfreeze an account involves getting the judgment erased. This option requires quick action as you only have 10 days to get your account unfrozen once the restraint is placed on your account. You need a reason to get the judgment erased, and each state’s laws are different about what qualifies. For example, in California, if you did not receive a Summons about the lawsuit that resulted in a judgment, you can use this reason to ask the judge to vacate the judgment.
Filing bankruptcy is another way to unfreeze your account. If you declare Chapter 7 or Chapter 13 bankruptcy, creditors must lift the freeze and you will have access to your funds. The debt you owe then becomes part of your bankruptcy case, and creditors must follow the decision made when your case is finalized. Just be aware that filing bankruptcy can leave a negative mark on your credit history and lower your credit score.
Open New Account
While filing bankruptcy keeps your creditors at arm’s length, that's not the case with your bank if you owe it money. According to the AllLaw website, the bank "has the right to 'set off' the debts owed to it against any bank account funds you may have with them." When you get behind on payments to the bank, consider opening an account at a new bank and transfer your money there so you still have access to the funds.