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How To Remove Freeze on Bank Account


Your bank account can be frozen when a creditor (with a court judgment) gives your bank a lien document. You will receive no advanced warning notice from your bank. You may first discover your bank account has been frozen when you are surprised to find out that you can’t use your debit card or when you bounce a check. Your creditor is allowed to freeze your account without warning after they win a “judgment” from a Court allowing the creditor to seize assets like checking and savings accounts.


New York State adopted a very protective law called EIPA (Exempt Income Protection Act) which gives a $1,920 protection for your bank account. This protects a minimum of $1920 from being frozen by judgment creditors. It does not matter where this money came from. It could be money from your job or your savings or any source. If you have less than $1920, your bank cannot legally freeze your account.


There is also $2,625 Protection for Bank Accounts with “Exempt” Funds. This includes funds that were directly deposited payments from a pension, government assistance, child support and other types of payments. $2625 is protected from creditors if the bank account includes directly deposited exempt payments within 45 days of the freeze on the account.


Examples of exempt payments: Social Security including Retirement, Survivors and Disability Benefits, Supplemental Security Income, Child Support Payments, Spousal Support or Maintenance, Veterans Administration Benefits, Public Assistance, Workers’ Compensation, Unemployment Insurance, Public or Private Pensions, etc.


The EIPA law protects financially struggling families from losing all their money – money that is necessary to pay for basics such as food, medicine and rent – to creditors. Your bank must allow you to have complete access to at least $1,920 or $2,625. In addition to EIPA, other New York State laws also protect exempt bank deposits


Unfortunately, banks frequently do not follow the law and freeze bank accounts despite the EIPA law.  In fact, when you call your bank regarding the freeze on your account, they do not inform you of your rights under the EIPA law.  Even worse, the banks tell you to call the creditor’s attorney for further instructions on how to release your account.  They will only give you the phone number for the creditor’s attorney. When you call the creditor’s attorneys, they will demand that you allow them to take some or all of the money from your bank account before they will release your bank account.


In addition to the EIPA law, you may qualify for an “Emergency Order” or “Order to Show Cause”.  You may be able to ask for help from the same Court that gave the right to freeze the account to the creditor.  If you did not receive notice of the lawsuit and if you have a “defense” or “answer” to the lawsuit, the Court may release your account by an “Emergency Order” or “Order to Show Cause”.  This is discussed at the bottom of this page.


Visit your bank in person.  Do not call the bank.  The procedure for releasing your account will depend on how much you have in your account.


If you have less than the $1920 or $2625 limit in your bank account, the bank is required to not freeze your account at all.  If you have more than the limits, they must return to you the $1920 or $2625 and give the rest to the creditor who froze your account.


Many banks will refuse to release the money to you and insist you call the creditor’s attorney.  If the bank employee refuses to release the money to you, you can complain to the NY banking department.


ALL exempt funds − no matter what amount − are protected by EIPA and NY State law if they are directly deposited. For example, a retired person receiving pension benefits may have $5000 in the bank and every penny in their bank account might be from their pension.  If these payments were directly deposited, ALL of these funds are protected and the bank should not freeze these funds.  If they do, the bank must return the money.