The most common reason individuals in New York experience a restraint on their bank account is because a creditor has obtained a judgment against them and is enforcing it against their bank account.
What does this mean in plain English? It means that you have been sued and lost and as a result the court entered a judgment against you for the amount claimed to be due to the creditor. Now, that creditor may be trying to collect on this money judgment by serving legal papers on your bank requiring it to restrain or "freeze" your bank account. This allows the creditor to take money directly from your account.
In New York State, a creditor cannot take all your money and also cannot take certain kinds of "exempt" funds. So, what can you do? One option is to contact a bankruptcy attorney and discuss whether your situation is appropriate for bankruptcy. Once you file bankruptcy, any restraints on your account can be lifted and if you are within a certain range of time, you may even be able to recover any money that has been removed from your account.
Of course, the best course of action is not to wait until things have gone this far. In fact, you should act as soon as possible after becoming aware of a lawsuit filed against you so you can evaluate your options before too much time passes or before what may be your last remaining resources are depleted. You will need funds to pay your bankruptcy attorney and if you are without any resources whatsoever, you may not be able to obtain relief.
Natasha Meruelo, Esq. is located at 445 Hamilton Avenue, Suite 1102, White Plains, NY 10601.