If you’re worried about creditors coming after your bank account, you’re not alone. Every day, people all over the country are dealing with the stress of having their assets frozen or seized by aggressive collection agencies. Fortunately, there are steps you can take to protect your bank account from creditors. In this blog post, we’ll discuss some of the most effective methods for safeguarding your finances.
A Frozen Bank Account
You safeguard liquid assets when you safeguard your bank account. When creditors try to seize your bank account, one of the most common things they’ll do is block those liquid assets so you can’t move them; thus, a frozen bank account.
What exactly does that imply? According to Investopedia, a frozen account is one in which no transactions are possible.
Freezing of your assets might be mandated by a court order or, in certain circumstances, might be done by the bank itself as a result of outstanding financial obligations. The freeze is frequently caused by a debt owed to someone else, either individuals or businesses. These are not always long-term freezes.
However, in many states, judgments or accounts may only be canceled if the court or account holder takes specific measures. These actions frequently include a debt payoff.
So, what can you do to protect your bank account from creditors? Here are a few tips:
-Make a budget and stick to it. This will help you stay organized and better understand your financial situation.
-Get current on all of your debts. This will show that you’re trying to fix the problem and could make the creditor more likely to work with you.
-Contact the creditor directly. Sometimes speaking with someone on the phone is more effective than dealing with them through mail or email.
-Explore debt settlement options. If you’re unable to pay back your debt in full, settling for less might be a better option than having your assets frozen.
-Seek legal help if necessary. If none of
Garnishment of a Deposited Amount
Creditors can take your funds even further by requesting a bank levy or garnishment, in addition to merely freezing your account. A legal procedure known as a bank levy is used by creditors to drain money from your bank account. After freezing your account, the bank must pay payments to creditors in order to fulfill the debt. A garnishment, on the other hand, is a collection process in which a creditor orders your employer to deduct a specified portion of your income directly from your payroll check. The employer then forwards that amount to the creditor for application towards the obligation.. In some cases, a bank levy and garnishment are used by creditors simultaneously to collect money owed. Since it is necessary to understand how the creditor has frozen your account in order to stop further actions against you, we will review each of these methods separately
An Offshore Bank Account
Your best chance of learning how to open a bank account that no creditor can touch is to start with an offshore bank account. This is especially true if you have your foreign account inside of an offshore asset protection trust. We generally combine a trust with an LLC so that the trust owns the company.
The bank account is in the name of the LLC. When everything is going smoothly, you are the LLC manager, but when things get rocky, the trustee (for example, our offshore law firm) takes over. A court may simply order you to return funds if you have an offshore account without these tools. These methods can restrict the capabilities of your local judge. Later we’ll discuss this further.