Legal Question in Credit and Debt Law in New York
When does the bank freeze your bank account due to credit card debt.
My husband was out of work for a year due to a car accident. When he returned to work the company had major cutbacks due to the bad economy. As a result he did not return to the salary he was making when he left. Now we find ourselves struggling to pay the mortgage and feed the family. We can no longer afford to pay our credit cards and are looking into debt management. We have heard that if the balances are unpaid the credit card companies can freeze you bank account. Obviously we have no savings, but my husband's paycheck is directly deposited to our checking account to pay critical bills. If it is possible for the account to be frozen, how long does that take? How many missed payments would result in this action? Should we consider bankruptcy?
2 Answers from Attorneys
Re: When does the bank freeze your bank account due to credit card debt.
To add to Mr. Tsiring�s answer, if you do not have sufficient income to pay all of your bills, then your mortgage should be your priority. Whether you can file for bankruptcy depends on several factors, including your combined income and the equity you have in your home. If you discharge your credit card debt in bankruptcy, this would free up income to keep your mortgage current and pay for necessities such as food. Keep in mind that if your husband has a potential claim for personal injuries as a result of the auto accident, it would be considered an asset of the bankruptcy estate. This means that the proceeds of any award can be used to pay your husband�s creditors. (Debtors can usually keep $7,500 of a personal injury award in bankruptcy).
Please contact my office directly if you would like to discuss your situation further. You may also visit my website at amdlaw.com for more information.
Re: When does the bank freeze your bank account due to credit card debt.
First of all you should try not to panic. In order for the creditors to freeze your bank account, they need to get a judgment through court. In order to get a judgment, they have to notify you that they initiated proceedings in Court against you. That means that you should not ignore any pepers they might send you.
Regarding your mortgage, there are many ways to modify you mortgage and mortgage payments so that it would be easier for you to stay afloat.
If you need further assistance, you can contact our firm.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
