IMPORTANT NOTE: The information on this page applies to accounts that have been frozen because of private debts like credit cards, medical bills, and bank loans. If you have child support debt, or if you owe money to the government for taxes or a student loan, different rules apply.
What is a frozen bank account?
A frozen bank account is a bank account that you cannot access because a creditor or debt collector has placed a restraint on it. When your bank account is frozen, you can put money into it, but you usually can’t take money out. In New York State, you have rights when your bank account is frozen. Read on to learn more, and visit the NY Attorney General’s know-your-rights page on funds protected against debt collection for more information. If you’re a low-income NYC resident, call our NYC Financial Justice Hotline at 212-925-4929 for help, or click here to request assistance.
Why is my bank account frozen?
A frozen bank account is a sure sign that a creditor or debt collector has obtained a court judgment against you (or your joint account holder, if you have a joint bank account). A creditor or debt collector cannot freeze your bank account unless it has a judgment. Judgment creditors freeze people’s bank accounts as a way of forcing or pressuring people to make payments.
If your account contained $4,080 or less when it was frozen, your bank was not supposed to freeze your account, under a NY law called the Exempt Income Protection Act. Call or visit your bank to request the release of your account. It may help to bring or show your bank the NY Attorney General’s know-your-rights page on funds protected against debt collection.
Why does my frozen bank account have a very large negative balance?
A judgment creditor typically puts a hold on your bank account for twice the amount of the judgment against you. This hold shows up on your bank account as a negative balance. You do not actually owe all this money to the judgment creditor. Rather, the amount you owe is the amount of the judgment, plus interest.
Does my bank have to give me notice before freezing my account?
Unfortunately, no. The law says that when the bank receives a restraining notice, it must freeze your account immediately, before notifying you. That is why most people discover that their account is frozen when they try to use their ATM card and it suddenly does not work.
However, your bank must send you certain documents after it freezes your account, including 1) a copy of the restraining notice (a document from the judgment creditor’s attorney telling the bank to freeze your account), 2) an exemption notice (a document explaining what funds are exempt), and 3) two copies of an exemption claim form (a document you can use to claim that money in your account is exempt).
If your bank account is frozen but you didn’t get an exemption notice or exemption claim forms, call or visit your bank to request them. Under the law, your bank is not allowed to freeze your account unless it receives these documents from the judgment creditor.
Does a judgment creditor have to give me notice before freezing my account?
A judgment creditor does not have to give you specific notice before freezing your bank account. However, a creditor or debt collector is required to notify you (1) that it has filed a lawsuit against you; and (2) that it has obtained a judgment against you. If your first notice of a lawsuit is a frozen bank account, you have not received proper notice under the law.
Do I need a lawyer to unfreeze my bank account?
No. Thousands of New Yorkers have successfully obtained release of their bank accounts without a lawyer.
How do I unfreeze my bank account?
A certain amount of money in your frozen account – up to $4,080, as of January 2026 – is automatically protected from judgment creditors. If your account is frozen, you can go to your bank and ask for this automatically protected amount. Visit the NY Attorney General’s know-your-rights page on funds protected against debt collection for more information.
If your frozen account contains more than $4,080 in exempt funds, you can claim that those additional funds are exempt and should be unfrozen. Your bank must send you two copies of a document called an exemption claim form. Complete both copies of this form and send one copy to your bank and the other copy to the judgment creditor’s attorney at the address is printed on the form. (Keep a copy for your records.) If you can, include proof, such as recent bank statements, that your money is exempt – this may help you get your account released more quickly. (We recommend that you redact your bank statements for privacy – the judgment creditor’s attorney only needs to see deposits, not purchases.)
It’s best to send these forms within 20 days of when the bank mails them to you, because then the bank and judgment creditor must follow certain deadlines under the law. If it’s been more than 20 days, you should still send proof to the judgment creditor that your frozen account contains exempt funds. It may take a little longer, but the judgment creditor must still release money that is exempt under the law.
You can also go to court to ask for help getting your frozen account released. The best way to unfreeze your bank account is to erase the judgment against you. This is called “vacating” the judgment. Once the judgment is vacated, the debt collector must release your account. A creditor or debt collector has no right to freeze your account without a judgment. For step-by-step instructions, see Vacating a Default Judgment.
Can I negotiate a settlement to get my bank account released without going to court?
If your bank account contains only exempt funds such as Social Security benefits, you do not need to negotiate a settlement in order the lift the freeze. Instead, you should send exemption claim forms and supporting documents to your bank and the judgment creditor’s attorney. See above for more information.
Your bank may tell you that you need to call the judgment creditor’s attorney to get your account released, even if you have only exempt funds in your account. This is false. If your account contains more than $4,080 in exempt funds, you can get your account released by sending exemption claim forms and supporting documents.
What if my bank account contains non-exempt funds?
If your bank account contains more than $4,080 in non-exempt funds, it is probably in your best interest to go to court to try to vacate the default judgment and release your account. Most of our clients find that they can negotiate a much better deal in court than they can outside of court. There are also many good reasons to try to vacate the judgment. In New York State, unpaid judgments are collectible for up to 20 years. Having an unpaid judgment exposes you to repeated efforts to freeze your bank account and/or garnish your wages. For your own protection, you are almost always better off getting the judgment vacated instead of settling outside of court.
Can a judgment creditor actually take money from my bank account?
Yes. A judgment creditor can hire a marshal or sheriff to seize, or “levy,” funds from your account.
How long will a judgment creditor wait before seizing my funds?
There is no set time limit. Some judgment creditors try to seize funds right away, and others never actually take funds at all. Most judgment creditors will wait at least a few weeks before attempting to levy your bank account.
If a debt collector levies my bank account, can I get my money back?
Yes. You should go to court and try to vacate the default judgment. As part of this process, you can ask the court to order the creditor or debt collector to return your funds.
What if I have a joint bank account?
The first step is to determine why the joint bank account is frozen. Usually, there is a judgment against one, but not both joint account holders. Call or visit your bank and ask for a copy of the restraining notice. This is the document that the judgment creditor’s attorney sends to the bank to freeze, or “restrain,” your account. The restraining notice contains information about the case, including the court, the index number, and the name of the defendant(s).
If there is a judgment against you, you can obtain release of the account by following the steps to vacate the default judgment. If the account contains only exempt income (for example, your mother’s pension or your child’s SSI), you should send exemption claim forms and supporting documents to the judgment creditor’s attorney to obtain release of the exempt funds, as described above.
If your account is frozen because of a judgment against someone else, it is best for the other person to try to vacate the default judgment, if at all possible. If this is not possible, you have the right to ask the court to order the release of your account.
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Under NY Banking Law 678, if you can prove that you added the other person to your account for convenience only, your entire account will be released. You must prove that you did not intend to give the joint account holder the right to own half of the money in the account. You can show that the joint account is only for your convenience by showing that you are the only person who used the account, that the other person did not have an ATM card or withdrawal privileges, or by providing other information that tends to show that the account actually belongs to you alone. You can also ask your bank to write a letter stating that the joint account was for purposes of convenience only.
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If you cannot prove that the joint account is for convenience only, then you can recover half of the money that is in the account. Under NY Banking Law 675, the judgment creditor cannot take more than half the money in the account unless it proves that the money belongs to the other person, and not to you. This is because the law presumes that half the money in the account belongs to you and half belongs to the other person.
More Information
How to Read a Civil Court Summons (PDF)
The Basics of Defending Creditor Lawsuits
Common Defenses to Creditor Lawsuits
Negotiating A Settlement Agreement in Court
What is Exempt from Debt Collection?
Helpful Links and Resources
New York Attorney General’s know-your-rights page on funds protected against debt collection
LawHelp/NY: attorney referrals and information for pro se litigants
National Association of Consumer Advocates: national database of consumer lawyers
New York City Civil Court: information about representing yourself in court, including contact information and court forms
eCourts: information about cases filed in New York courts
Laws of New York: complete text of New York laws
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