How to Unfreeze a Checking Account

by Craig Berman
When your bank freezes your account, you might as well cut up your ATM card.

A frozen checking account can be a nightmare. Your ATM card doesn’t work, checks presented against the account won’t clear and bills set up to come out of the account automatically don’t get paid. Depending on the reason the bank chose to take that course of action, getting your account unfrozen can be a matter of a few phone calls or a time-consuming and costly process.

Thawing Out

Determine why the account is frozen. The bank may be concerned it was used fraudulently, whether by you or an unauthorized user. A creditor may have gotten a legal judgement against you and a court order to freeze the account because of an unpaid debt. Once you know exactly what's going on, it's time for a phone call.

Call your financial institution and ask them to unfreeze the account if their action was caused by something other than a court order. Explain the reason for the activity that caused the bank to act. If you were traveling abroad and the bank noticed a lot of overseas charges and froze the account because of fraud concerns, explain where you went and offer to provide proof to make things clearer.

Get the judgement vacated if one was filed against you. If you were never notified that the creditor was taking legal action, inform the court. If there's no record of you having received a summons and if you can convincingly show you weren't contacted, you may be able to have the court remove the judgement. Once that happens, bring the paperwork to your bank and ask them to unfreeze your account.

Pay the debt if your account was frozen because of a judgment against you. Banks have to freeze the account once they get a restraining notice from a judge. You’ll probably have to take proof of payment to the bank and the courthouse to get the order vacated.

Call an attorney, who can work to unfreeze the account. He can also be valuable in navigating the local systems and engaging his counterparts on the opposite side. This can be beneficial when your attorney can negotiate the amount at stake in the dispute downward.

Declare bankruptcy. If all else fails, doing so will allow you to unfreeze your checking account. Once that happens, all attempts to collect the debt must cease and any judgment is vacated. The downside is that declaring bankruptcy brings a host of new problems with it. The negative impact on your credit rating can remain there for 10 years and makes loans for big-ticket items like houses and cars more difficult to get. It also will increase the interest rates you're likely to be offered on subsequent credit card offers. It may be more cost-effective in the long term to find another way to unfreeze your account.

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