Can my bank account be frozen by a collection agency without being notified?

Right now they are just calling, but I do not answer. They sometimes leave messages to call back or they leave no message at all. If they can freeze it at this point of the collection process what are the steps and how long do I have?

NO. IT ABSOLUTELY CANNOT.

They have to serve you with papers. You then go to court and try to work out a settlement.

I had my bank account frozen about six years ago. I checked one day and had a zero balance.

I never received the papers telling me to go to court because the process server went to the wrong apartment and my a**hole neighbor threw them away without telling me.

Because I didn't know, I didn't go to court and the judge automatically issued a judgement in their favor. What I later found out is that they had screwed up the address on the papers so I was able to get the judgement reversed and I got all my money back. My due process had been denied and the account was over the statue of limitations for my state (NY) so they couldn't collect anymore. This is referred to as having a judgement "vacated."

The other thing is this; once they got the judgement they still had to get to my account. There's no law that says I had to give them that info.

What they usually do is send out something called an "information subpeona." Once they have the judgement they send this to the legal departments of every bank that is within a certain radius of your address, hoping to find your account. If your account is at a bank that gets one, that bank has no choice but to levy it. Eventually, a sheriff or some official comes to get the money to send them.

Best to not let it get to the point. You should try to work something out with them. They can also garnish wages if they get a judgement. Try to work out a system of small payments with them.

Here's something else; most states have a "Cease And Desist" law. This means you can write to the collection agency and ask them not to contact you by phone and they have to stop. You can find many good templates for this letter just by googling the term "cease and desist letter, creditor, collections" those types of things. They then have to stop calling you. I'll warn you of this though; once you tell them they can't call they'll move quicker to start a legal action.

Another thing to consider is that if you don't owe them that much they usually don't want to go to court because it costs too much and its not worth it. Most debt is purchased by collectors. So let's say you owe Master Card $1000. The collection agency buys the debt from Master Card at 60 cents on the dollar, for example. Then they try to collect a $1000 for a debt they paid $600 for. That's how they make a profit. Master Card has already written you off and just wants some of its loss back which is why they sell the debt at a reduced rate. Its usually not even the original person you owe the money to who you are dealing with.

Its always a good idea to take the name of the collection agency pursuing you and google it. Many of these people engage in shady practices and if they have, believe me it will show up on a credit message board and you can see how others have dealt with them.

Another thing I've done when I felt in the past I was going to be in this situation; I kept a very limited amount of money in my checking account, at the most 20 bucks. I would use it to clear checks and then take the money out right away.

Try your best to settle it; bad credit follows you around like an albatross. Believe me, I know.

Once again, THEY CAN'T FREEZE AN ACCOUNT UNTIL THEY SUE AND GET A JUDGEMENT.

This is a common threat by collection agencies. There is no collection agency in the world that can "freeze" your bank account. They will however make up everything in the book to get you to pay.

Collection agents may be cold, heartless, liars who will burn in hell someday but they have no ability or authority to take your money from you.

The only people who can do that are the courts and then only in certain situations (child support for example).

They are trying to scare you. Get your number changed! Then send them a letter requiring them to stop contacting you (this is your right).

A collection agency can't freeze your bank account, but they can go to court and get a judgment against you. A judge may then freeze your accounts or garnish your wages in order to satisfy the judgment.

You will be notified if they are going to court. You will be given an opportunity to respond to the complaint.

No.. You have to be notified and prior to that they have to get a court order so you will receive court papers first

No if that was the case everyone will have their bank accounts frozen.

They have to have a judgment on you for the dept. That means they will have to take you to court first.

no this is still America not Russia ,call and tell them to stop calling ,,, then pay your remainder of what you owe them....

No, a collection company cannot freeze your bank account.

Now screw up on your income taxes or child support and the IRS or State will be happy to place a levy on your account and freeze everything.

The worst a collection company can do is go to court and get a "judgement" against you and they will only do this if the amount is big enough...usually over $5-10K.

If the collection company does try to get a judgement, then you will be notified by the court of the date of the hearing. If you do not show up, then they will automatically win and the judgement then becomes a "public record" in the county where you live and will attach to any real property that you own, if any. If you don't own any property, it will stay on your credit report for 10 years and drop your score. After 10 years, the creditor can go back to court and get it renewed for another 10 years if they choose, so it's best to go to court and plea for a reduced amount and payment arrangements before things get out of hand.

The amount will continue to accrue interest every single month of every year you don't take care of it and will hinder you from getting credit anywhere else, not to mention cost you way more than you owed in the first place!

If the collection company does not file a judgement, you have two choices.

1. Talk to them and see if they'll settle for less than the full amount. Most will if you can pay them the entire amount now. If not, see if they'll take payment arrangements. Note: Before you pay them a dime, get the arrangement IN WRITING FIRST! This way you are sure to get what was verbally agreed upon and can later use that letter along with proof of your payments to send into the 3 major credit bureaus to get that item removed off your credit in case they don't remove it after it was paid.

2. You can hide and change your number and ignore them for 7 years and it will eventually drop off your credit. In the meantime, don't plan on getting credit for anything, or if someone does agree to give you credit, they may require that you pay off the collection account then (which will then have ALL that accrued interest), or you will be categorized as a higher risk and will pay higher interest accordingly.

The best bet is to take care of it as soon as you can. Work with them, and usually they'll work with you. Sometimes they'll take up to 50% off of the balance and "settle for payment in full" that way, but again....GET IT IN WRITING FIRST!

it depends on what you do. but you can always talk to them and ask. it always helps to ask!

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.054
Copyright (c) 2011 Financial Crisis Sunday, May 27, 2012 - Terms of use - Privacy Policy