How do I get my credit union account unfrozen if only non-exempt funds are in it?
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How do I get my credit union account unfrozen if only non-exempt funds are in it?
My bank account was frozen last week by a credit union and they are refusing to unfreeze it based on information that I researched stating that certain types of income is exempt from being frozen. I have only unemployment, public assistance, and child support going into this account. I need to have these funds made available to me as soon as possible in order to pay bills. I never received anything from the credit union regarding who authorized this account to be frozen or anything.
Asked on October 18, 2010 under Bankruptcy Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Before a creditor can freeze or "garnish" your bank accounts, they must establish that there is a valid debt and then obtain a judgment against you. Once it has done so, it can then petition the court to garnish your accounts and have those funds turned over to them to satisfy the judgment. However, typically only disposable earnings can be seized. This means that some assets are exempt from collection, including unemployment benefits, public assistance, and child support. While a creditor cannot garnish such benefits directly, it can freeze an bank account that they have been deposited in.
When a bank account is frozen, this means that a debtor cannot withdraw any money from the account. After a set period of time, usually 60-90 days, the money is then paid to the creditor. If an exempt asset is frozen, you may file an objection with the court during the waiting period and claim your exempt funds. In your case you will ned to provide proof as to where your deposits came from. You will also have to fill out a form(s). At that point your exempt funds money will be released. However, any remaining non-exempt funds, if any, will be paid over to your creditor.
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