Get rid of your debt faster with debt relief
Choose your debt amount
Or speak to a debt consultant 844-731-0836
- There is no knowing for certain when a judgment-creditor may freeze a bank account.
- An out-of-state creditor must domesticate a judgment.
How long does it take for an out-of-state judgment-creditor to freeze a bank account?
I recently moved from New York to North Carolina. I need to open up a bank account to cash a check but I am worried that an old judgment may surface and a creditor may try to freeze my account. How long does it take for a creditor to freeze an account from the time I open the account? In other words, do I have at least a couple weeks to draw out the funds before any creditor can try to levy the account?
My answer assumes your judgment was from a court in your former state and not your new state.
Although no one can guarantee you a specific amount of time before the judgment creditor in question attempts to freeze your bank account, I would expect that upon opening a new account in a new state, you would have at least a few months before you need to worry about the creditor taking such action.
The primary reason for the delay in your case is your change of residence to a different state. Were you still residing in your former state (New York), the creditor would likely be able to freeze your new bank account quickly. However, because your new account will be opened in your new state of residence (North Carolina), and the creditor's judgment was entered in your old state, the creditor would be required to file a motion with the local courts in your new county of residence seeking to domesticate its judgment. Once domesticated in your new home state, the judgment would be enforceable as if it had been granted by your new state's court, and the creditor would be able to freeze your bank account, garnish your wages, place a lien on your property located in your new state, etc., just like any other judgment creditor.
Although it is possible the judgment-creditor may file for domestication of its judgment in your new state of residence, and subsequently seek to levy your new bank account, many creditors choose not to pursue this course of action, as it can be a costly endeavor and often does not improve their ability to collect. The reason is that the creditor would need to file its motion for domestication before it knows whether you own any assets in your new state that can satisfy the judgment. Your new bank or credit union will not notify the creditor you opened a new account, so it will be up to the creditor to try to find where you are now banking. This is a difficult task for any creditor, especially if you are banking with a relatively small bank or credit union and have not paid the creditor from the new account. Although I advise you to be careful about using the new account while you have an outstanding judgment against you, I would be surprised if this creditor will take action against your new account for a long time, if ever.
To learn more about your rights as in the collections process, see the Bills.com resource Collections Advice.
I hope this information helps you Find. Learn & Save.
Best,
Bill
Debt statistics
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in Maryland, 24% have any kind of debt in collections and the median debt in collections is $1562. Medical debt is common and 10% have that in collections. The median medical debt in collections is $508.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.
