bank account frozen

[buglebe]

My neighbor's bank account was frozen. She came over Tuesday telling me about it. I have never heard about something like this before. This is what she told me. They had a credit card they owed $4000 to. They negotiated with the company that they would pay a certain amount each month but it was less than the amount that the minimum but they did agree. I think she said it was $100 a month they would pay. The credit card company raised the interest rate to 29%. She said this eventually made the $100 not even enough to pay the interest each month. They now owe this credit card company nearly 8 thousand because of interest. They were still getting harrassed by the company and she told them she was paying the $100 like they had agreed on but the lady said that doesn't even pay the interest now and my neighbor said that is all I can afford to pay. The credit card company froze their bank account. The sheriff served them papers before the bank got the notice to freeze the account so they went to the bank and took what little they had out and left $8. Then he got his automatically deposited salary check changed to go to him instead of the bank. It is making everything very very inconvenient for them but the credit card company didn't get but $8. She has not figured out yet how they are going to cash his company check because the closest bank of the kind his company uses is 65 miles away. Has anyone ever heard of this before? Maybe someone who works at a bank can tell me more about it. Thanks.

[Advertisement]

[jasmine]

wow, that's new, I never heard of a credit card company having permission to freeze someones bank account. I would close it, before they start taking out money or something and they get the over the limit charges from the bank.
I guess they could start a checking somewhere else, or go to a check cashing place, in fact, walmart cashes payroll checks for only $3.

http://wiki.answers.com/Q/Do_collect...al_credit_card

http://search.aol.com/aol/search?que...yword_rollover

[freeby4me]

Wow, I realize they dont have much money, but they should talk to a lawyer and find out what else they can do. Can they garnish his wages?
I know everyone says to "try" and deal with the credit card company but their best bet would have been to let it go to collections and then deal with those people. That totally sucks for them, I wish I could tell them something that could help.

[Memedav]

This actually happened to my sister about 8 years ago...so it's been going on for awhile. She owed a CC company (Citibank) and her checking acct was frozen. She ended up giving them $...most of what was in her acct, and then settling for monthly payments around $200. I don't think she discussed it with a lawyer or anything, but I do recall the bank telling her there was nothing they could do because it was legal since there was a judgement against her.

Your friend may have a judgement against her also and maybe she isn't aware of it. You can't do anything with the account (switch banks, close, etc) while it is frozen. The only thing that remains is a direct deposit...they will snatch that $ right up but won't let any of it go to her. Crappy to say the least. Tell her if she goes to another bank they will be able to see her acct. is in frozen state and they may require she deposit a check and have it held a wk or so before giving her access to it. I agree with jasmine, tell her to head to Walmart.

[SLance68]

She obviously knew she had a judgment against her she just 'forgot' to tell you that part. She will now be on the cash system for a while. Pretty nice of the CC company to force her onto the Dave Ramsey envelope method. If your friend or anyone you know has problems with credit cards they should consider Consumer Credit Counseling Service - they are a non-profit and they will go in and negotiate with your credit card companies to get lower or zero interest to get them paid off. You will not be able to use them any longer but that might be a good solution.

[sunniekiss]

Ok when the negoiated with the cc companies, the cc had to agree to a set amount each month. That account would have actually had to of been closed & they can not charge intrest. If an agreement was reached she should have paperwork to back it up.
It really sounds to me that she isn't telling you the entire story. It sounds to me that they made an agreement & your neighbor failed to live up to the terms of the agreement & now the cc can go after the entire amount PLUS interest. Sounds like this went in front of a magistrate & a judgement was entered against them.
Never, never, never, never wait to let a debt go into collections. Deal with the original debtor on your own & be prepared to negoaite. The cc companies will sell you debt to collections for 5-10 cents on the dollar. Start at offering them 11 cents on the dollar. You may have to go all the way up to 20 cents on the dollar but the cc companies will only be too happy to have the debt settled for more than they expected. Worked for me.
BUT & this IS VERY IMPORTANT, make sure the settlement paperwork lists the ACCOUNT AS PAID IN FULL & not pay-off. A pay-off will haunt for for 7-10 years.
HTH.

[buglebe]

I think I just forgot to put it in that they had a judgement against them but I don't know what that means.

[fleabones3]

A judgement means she went to court and she was ordered to pay the balance .. whether thru payments or not. If she didnt follow thru with what the court ordered ( as in not making the full payments that was agreed to, etc) then the credit company can then freeze their accounts and collect all money that is in the account. Like someone else said, they will be having to deal with cash from now on, and they do need to contact a credit consolidation place. What's going to hurt them is they more than likely forfeited on a judgement and/or agreement so the CC may not be so willing to try to work out another arrangement with them

[buglebe]

I know they didn't go to court. Can you get a judgement against you without going to court? I know the part about agreeing on a payment is true.

[Anniston]

The only time I have heard of something like this that did not involve court was the IRS freezing a business bank account.

[SLance68]

I know they didn't go to court. Can you get a judgment against you without going to court? I know the part about agreeing on a payment is true.

There had to be a court order to put a freeze on her bank account so yes there was a court hearing she just didn't bother to show up. She is just leaving parts out so that someone with sympathize with her. She obviously didn't keep up the payment arrangement and part of that is knowing they will seek a judgment against you if you don't pay what is owed.

The only time I have heard of something like this that did not involve court was the IRS freezing a business bank account.

The IRS freezing an account is another thing in its entirety that is for unpaid taxes and they don't have to go to court or let you know they are going to freeze the accounts. You pretty much know this is going to happen if you didn't pay your taxes or a business not paying their payroll taxes.