Written by Seymour Thursday, 07 April 2011 13:21
When I first meet with clients who have had their bank accounts frozen, they often think that they have lost their right to the money. This is usually not correct, and it is very important to understand the procedure involved.
In New Jersey, a creditor cannot get money from your bank account released to them without a Court order. Once a creditor has a judgment, they can freeze your bank account. What this means is that you personally do not have the right to use the money while the account is frozen.
The good news is that there are ways to get the money released to you. For example, in New Jersey there is a law that permits a debtor to have a release of the first
$1,000 in the bank account based on what is known as an exemption. This means that the creditor does not have the right to the first $1,000 if you claim your exemption. The catch is that you have to claim your exemption, and a good way to do this is by contacting the Court, and filing papers with the Court to claim the exemption.
Many creditor’s attorneys are cooperative, and when the client with the frozen bank account comes to see me, I normally just call the creditor’s attorney, and let the creditor’s attorney know that the client wants to claim his/her $1,000 exemption. Most attorneys voluntarily agree to release the money at that point.
If they do not voluntarily release the money, we can file some routine papers with the Court, and the Court will almost always permit release of the $1,000.
The frozen money will not go to the creditor unless the creditor or the creditor’s attorney files a motion with the Court seeking an order to turn over the money in the account. The debtor has to be notified when such an application is made, and the debtor has the right to object to the turn over request.
Another way to get that money back is by filing for bankruptcy. The filing of a bankruptcy petition will automatically release the freeze on the account, and the debtor will have immediate access to the money again.
Even if the money has been turned over to the creditor prior to the bankruptcy filing, many times we can get our client’s money back if they have acted quickly. Normally, if the bankruptcy is filed within 90 days of the bank account freeze, even if the money has been turned over to the creditor during those 90 days, we can usually obtain an order requiring the creditor to turn over any funds taken during the 90 day period.
If you have had your bank account frozen, it is best to contact an attorney right away so that you can be fully familiar with your rights and responsibilities. The main point to remember is that just because your account is frozen, that does not mean you have lost your money. There are lots of things that can be done to get that money returned to you so that you can use it for yourself as needed.
Feel free to call us with any questions you might have. I am usually available between 8:00 am and 8:00 pm at (856) 696-8300. I look forward to helping you.