Bank Freezes Check Account To Collect Credit Card Debt

A creditor can garnish a bank account after it obtains a money judgment and the Sheriff’s office issues a writ of execution. I am often asked whether a credit card company can freeze an account without a judgment and without even filing a lawsuit. The general answer is "no" but it does happen occasionally.

This week a prospective bankruptcy debtor called to complain that his bank had frozen his account without warning because he was delinquent on a credit card issued by the bank. Sometimes people don’t convey complete information to attorneys, and it could be that the credit card company had a judgment already. Another possibility is that the bank had issued a secured credit card and that there was a credit card agreement which gave the bank the right to collect by taking money from the borrower’s bank account without first going to court. In the absence of a secured credit card arrangement or a civil judgment the bank may have improperly collected its credit card debt in which case the borrower could have a claim against the bank.

posted by Jonathan Alper, bankruptcy and asset protection lawyer, Orlando, Florida