Can Bankruptcy Unfreeze My Checking Account?

Has your Florida bank account been frozen as a result of a creditor obtaining a judgment against you for a debt you owe? If you are considering the possibility of bankruptcy, you should know that your filing is likely to result in your account being unfrozen and any existing garnishment orders being halted due to the automatic stay in US bankruptcy cases. Our West Palm Beach bankruptcy lawyer can explain in more detail, and an attorney at our firm can speak with you today about the possibility of a bankruptcy filing.

How Bank Account Freezing Happens When You Owe a Debt 

The ability for a creditor to freeze your bank account is something that can happen under Sections 77.03 and 77.06 of the Florida Statutes. It is important to know, however, that a creditor or debt collector cannot immediately freeze your checking account to collect debt when you are past due. Instead, the creditor or debt collector must go through a series of legal steps to be able to have your money frozen.

First, the creditor must file a debt collection lawsuit against you. If this happens, you will be served, and you will have the opportunity to seek legal advice to defend against the lawsuit. If the creditor wins the lawsuit against you, they can then seek a garnishment from the court. By garnishing (sometimes known as attaching) an account or wages, the creditor can obtain some of the money that you owe according to the judgment. If the court issues a garnishment order, the creditor can then serve your bank with the garnishment order. Once the bank receives that order, it can then freeze your account until the creditor receives the money owed.

How Bankruptcy Can Unfreeze Your Checking Account 

Once you file your bankruptcy petition, an injunction known as the automatic stay will immediately apply to your case. What this injunction does is this: it prevents creditors from continuing to take existing debt collection actions against you, and it prevents any new or future actions from being taken to collect debt. The automatic stay halts garnishments, including those that result in bank accounts being frozen.

The long-term effects of the automatic stay with regard to your bank account garnishment will depend on the type of bankruptcy you are filing for and the exemptions for which you are eligible. A bankruptcy lawyer in South Florida can explain everything in more detail based on the particulars of your financial situation.

Contact Our West Palm Beach Bankruptcy Attorneys Today 

If your bank account or wages were garnished by a creditor or debt collector and you are considering a bankruptcy filing, you should discuss your case with one of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller. We can provide you with more information about how a bankruptcy filing can end an attachment or garnishment, and how it may be able to help you get a fresh start in other financial ways. Contact our firm today to learn more about how we can assist you.

Sources:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0077/Sections/0077.03.html

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0077/Sections/0077.06.html