Post-Judgment Collections: How Freezing a Debtor’s Bank Account Can Help Secure Payment
As a plaintiff in a lawsuit, obtaining a court judgment against a debtor is a significant victory. However, a judgment alone doesn’t guarantee that you will recover the money owed to you. Often, the real challenge begins after the judgment is rendered. That’s where post-judgment collections come into play—and one of the most effective tools at your disposal is freezing the debtor’s bank account.
In this post, we’ll discuss how post-judgment collections work, the process of freezing a debtor’s bank account, and why this strategy can be essential for securing payment.
Understanding Post-Judgment Collections
When you win a court judgment, it’s a formal recognition that the debtor owes you money. But without action, a judgment is just a piece of paper. In most cases, you will need to take additional steps to collect the debt. Post-judgment collection actions are legal measures designed to ensure you get paid.
These actions may include:
- Wage Garnishment: Taking a portion of the debtor’s wages directly from their employer.
- Property Liens: Claiming a legal right to the debtor’s property until the debt is paid.
- Bank Account Levy: Freezing the debtor’s bank account and potentially seizing funds to satisfy the debt.
Among these, freezing the debtor’s bank account can be one of the most effective ways to ensure that your judgment is paid.
How Does a Bank Account Freeze Work?
When a debtor fails to pay after a judgment, you have the right to take further steps to collect. One of the most powerful tools is obtaining a bank levy, which allows you to freeze funds in the debtor’s bank account.
Here’s how the process works:
- Identify the Debtors Banks: Identifying what bank the debtor has accounts at is the first major hurdle. Many judgment creditors cannot do this without the assistance of an attorney or private detective who have experience and tools to find the accounts.
- Citation to Discover Assets to Bank: After receiving the judgment, you can issue a citation to discover assets to levy the debtor’s bank account. This may involve submitting certain paperwork to show that the debt is valid and that you are attempting to collect the debt.
- Bank Notification: Once the citation is issued, your attorney will notify the debtor’s bank of the levy. This instructs the bank to freeze the specified amount of funds in the debtor’s account.
- Freezing the Funds: Upon receiving the notice, the bank is required to freeze the debtor’s account for a set period. During this time, the debtor cannot access their funds, providing you with a strong position to secure payment.
- Withdrawal of Funds: After the freeze, you can ask the Court to issue a turnover order of the funds that are owed to you, assuming they are available in the debtor’s account.
Why Freezing a Bank Account is an Effective Collection Strategy
Bank account freezes can be a particularly powerful tool in post-judgment collections, for several reasons:
- Immediate Pressure: Debtors often rely on their bank accounts to pay bills, purchase necessities, and manage their day-to-day expenses. Freezing the account places immediate pressure on them, often prompting them to negotiate payment to avoid further inconvenience.
- Access to Liquid Assets: A bank account is a direct line to the debtor’s liquid assets. By freezing it, you have a higher chance of recovering the debt without waiting for the debtor to sell property or other assets.
- Easy to Enforce: Banks are legally required to comply with a court-ordered levy, making it one of the more straightforward collection actions to enforce. The process is generally quicker and less complex than pursuing other forms of collection.
- Helps You Avoid “Hiding” of Assets: Debtors may attempt to move or hide their assets to avoid paying their debts. Freezing their bank account eliminates this possibility, as you are locking in a portion of their available assets.
Final Thoughts: The Power of a Bank Account Freeze
Freezing a debtor’s bank account is one of the most effective ways to secure payment after a judgment. It places pressure on the debtor to act quickly and helps you access liquid funds that may otherwise be difficult to recover. While the process can be complex, the rewards for creditors who take the necessary steps can be significant.
If you are considering using a bank account levy to collect on a judgment, ensure that you understand the legal requirements and timing. Working with an attorney specializing in collections can help you navigate the process and increase the likelihood of a successful outcome.