Can a Debt Collector Freeze My Bank Account?

 Posted on October 07, 2021 in Bankruptcy

There are many situations where a person may face overwhelming debt that they are unable to repay. In these cases, a person may need to deal with harassment from creditors, who may do everything they can to collect what is owed. In some cases, creditors may pursue legal action, and a debtor may worry that their wages may be garnished or that a creditor may attempt to freeze their bank account and prevent them from accessing or spending the money they have earned. By understanding how these cases are handled in Texas, debtors can determine their best options for addressing these issues.

Wage Garnishment and Attachment

In much of the United States, creditors may pursue judgments against those who owe them money, and if a court rules in their favor, they may be able to garnish a person’s wages. In these cases, a percentage of the person’s income will be withheld from their paychecks and sent to the creditor. However, Texas limits the types of cases where wage garnishment is available. Generally, wages can only be garnished to pay child support or spousal support that is past due. The IRS can also garnish wages to collect tax debts, and wage garnishment may also be available for student loans.

Since most creditors will be unable to use wage garnishment, they may instead pursue a writ of attachment against a debtor. In these cases, they will seek to “freeze” a person’s bank account(s), preventing them from making withdrawals or transfers. They may then look to seize some or all of the funds in an account in order to cover the debts that are owed. 

Attachment is only available if there are valid debts that are owed by a debtor to a creditor, and it cannot be used as a form of harassment or an attempt to cause financial harm to someone. A creditor will need to show that unless they are able to freeze a person’s assets, they are likely to be unable to collect debts. The specific reasons that a creditor may use attachment include:

• The debtor has hidden or plans to hide money or assets with the intent to defraud creditors.

• The debtor has disposed of or plans to dispose of property (such as by making a large purchase) with the intent to defraud creditors.

• The debtor plans to convert assets to cash with the intent of hiding these funds from creditors.

• The debtor plans to move out of the state of Texas or remove property from the state or from the county where a creditor has filed a lawsuit against them.

• The debtor has hidden in an attempt to avoid being served with notice of a lawsuit.

• The debtor owes debts to a creditor for property that was stolen or obtained under false pretenses.

Contact Our New Braunfels Debt Relief Attorney

Debtors can address lawsuits by creditors, wage garnishment, or attachment by filing for bankruptcy, which will place an automatic stay on creditors and prevent them from attempting to collect debts. If you are being harassed by creditors, Law Offices of Chance M. McGhee can help you determine your best options, and we will work with you to complete the bankruptcy process and receive relief from your debts. Contact our Schertz bankruptcy lawyer at 210-342-3400 to schedule a complimentary consultation.

Sources:

https://statutes.capitol.texas.gov/Docs/CP/htm/CP.61.htm

https://statutes.capitol.texas.gov/Docs/CN/htm/CN.16.htm#16.28