Debt Collection Tips: Restraining an Account

Once the creditor has obtained a Judgment from a court, one of the options for obtaining payment of the Judgment is to restrain funds of the debtor contained in an account.

The process is to serve a “restraining notice” upon the subject bank, as permitted by statute. In turn, the bank then holds the funds contained in accounts belonging to the judgment debtor pending further action on the part of the creditor. This restraint remains in effect upon the funds for a period of one year.

The next step of the creditor is to remove the restrained funds from the bank. This is done either through an Execution issued to a Sheriff or Marshal (since that person is deemed as “enforcement officer” able to obtain the funds), or through a “turn-over proceeding,” where the creditor begins a separate action against the debtor and the bank as a garnishee requesting that the court direct the garnishee/bank to turn over the restrained funds.

Once the restrained funds are delivered to the creditor through either of the above methods, the accounts of the debtor will continue to be restrained by the bank (where, in the event that new funds were deposited, they would be restrained as well) until the creditor issues a “release” letter to the bank or a Satisfaction of Judgment is filed by the creditor.

Where an account of the debtor is held jointly with another person, it is necessary to file a turn-over proceeding, as the court must determine the respective rights of the account-holders to the funds. One defense to the proceeding is that the debtor is a joint account-holder only for convenience purposes.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website:
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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