Frozen Bank Accounts in New York

If a creditor has sued you and has obtained a judgment against you, your bank account may be “frozen” to satisfy the judgment. You will receive a letter from your bank informing you that a "restraining notice" was served on the bank, and that funds in your account are being held to satisfy the creditor’s judgment against you. The amount restrained is double the judgment amount.

It is important to seek legal advice if you have had a judgment entered against you. Unpaid judgments in New York are collectible for up to 20 years. In addition, unpaid judgments will appear on your credit report, which can ultimately affect your ability to obtain future loans, credit or housing.

Long Island Frozen Bank Account Lawyer

If your bank account has been frozen due to a judgment entered in Suffolk County, Nassau County or Queens County, New York, contact the law firm of Andrew M. Doktofsky, P.C., at (631) 673-9600, for a free consultation to discuss your legal rights and your options for getting your bank account released.


Long Island Frozen Bank Account Information Center


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Civil Judgments in New York

In order to serve a restraining notice in New York, a creditor must first obtain a judgment against you. This means that the creditor was awarded a monetary amount by the court. For New York consumers, judgments typically arise from lawsuits to collect credit card debts, past due medical bills, and personal loans.

Judgments in New York are often awarded by default. This happens when the person being sued fails to respond to the summons. In most debt collection cases, the plaintiff does not even have to obtain a judge’s approval to be awarded a default judgment. This is due to the fact that under New York law, a plaintiff creditor can make an application to the court clerk for a default judgment if the claim is for a sum certain or for a sum which can by computation be made certain.


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New York Exempt Income Protection Act (EIPA)

In New York, under a law called the Exempt Income Protection Act (EIPA), certain funds in bank accounts are protected, and judgment creditors are prevented from taking these funds to satisfy a judgment. The EIPA is codified in New York Civil Practice Law and Rules § 5222 and § 5222- The following is a list of the most important provisions of the New York Exempt Income Protection Act:

  • The first $1,920 in any bank account is not subject to restraint. If an account contains $1,920 or less, the account is not restrained and the restraining notice is deemed void.
  • If statutorily exempt payments were made by direct deposit or electronic payment into a bank account, within the 45 days preceding service of the restraining notice, then the first $2,625 in the account is not subject to restraint. If the account contains $2,625 or less, the account is not restrained and the restraining notice is deemed void. Statutorily exempt payments include the following:
    • Social Security benefits
    • Veterans Administration benefits
    • Supplemental security income (SSI)
    • Disability benefits
    • Child support
    • Worker’s Compensation
    • Railroad Retirement benefits
    • Public or private pension payments
    • Unemployment benefits
    • Public assistance
  • The above provisions, regarding amounts not subject to restraint, do not apply when:
    • The state of New York, or any of its agencies or municipal corporations is the judgment creditor; or
    • If the debt being enforced is for child support, spousal support, maintenance or alimony.
    For either of these exceptions to apply, the restraining notice must contain the following notice, in sixteen point bold type:
    “The judgment creditor is the state of New York, or any of its agencies or municipal corporations, AND/OR the debt enforced is for child support, spousal support, maintenance or alimony.”

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Procedure for Claiming Exemption for Funds in New York Bank Accounts

Judgment debtors in New York, who have had their bank accounts restrained pursuant to a restraining notice, may claim that some or all of the funds in a bank account are exempt from seizure. The following is a list of funds that are considered to be exempt from seizure in New York:

  • Social Security benefits
  • Veterans Administration benefits
  • Supplemental security income (SSI)
  • Disability benefits
  • Child support and spousal support
  • Worker’s Compensation
  • Railroad Retirement benefits
  • Public or private pension payments
  • Unemployment benefits
  • Public assistance
  • Ninety percent of wages or salary earned in the prior sixty days

New York law provides specific procedures that must be followed by the judgment creditor, the bank, and the judgment debtor in order to determine if funds in a bank account are exempt. The provisions of the statue are as follows:

  • When serving a restraining notice on a bank, the judgment creditor must also provide the bank with an exemption notice and two exemption claim forms.
  • Within two business days of receipt of the restraining notice, the bank must mail the restraining notice, exemption notice, and exemption claim forms to the debtor by first class mail to the debtor’s last known address.
  • The judgment debtor must complete the exemption claim forms, sign them under penalty of perjury, and serve them within twenty days of the date postmarked on the correspondence containing the notice and forms. The judgment debtor must serve one completed exemption claim form on the bank and the other on the attorney for the judgment creditor (or directly on the judgment creditor if there is no attorney). The judgment debtor may serve the exemption claim forms in person or by first-class mail.
  • If you are claiming that funds are exempt, you should include proof with the claim form, such as an award letter from the government, an annual statement from your pension, pay stubs, copies of checks, bank records showing the last two months of account activity, or other papers showing that the money in your bank account is exempt.
  • The bank must release all funds in the judgment debtor's account eight days after the date postmarked on the envelope containing the executed exemption claim form mailed to the bank, or date of personal delivery to the bank, and the restraint shall be deemed void, unless the judgment creditor interposes an objection to the exemption within that time.
  • Where the account contains some funds from exempt sources, and other funds from unknown sources, the judgment creditor must apply the lowest intermediate balance principle of accounting and instruct the bank to release the exempt money in the account, within seven days of the postmark on the envelope containing the exemption claim form.
  • A judgment creditor may object to the claim of exemption by filing a motion with the court within eight days after the date postmarked on the envelope containing the executed exemption claim form.
  • If no claim of exemption is received by the banking institution within twenty-five days after the notice and forms are mailed to the judgment debtor, the funds remain subject to the restraining notice or execution.
  • After receiving an objection from the judgment creditor within the specified eight-day period, the banking institution shall retain the funds claimed to be exempt for twenty-one days unless otherwise ordered by the court. If the period of twenty-one days expires and the banking institution has not been otherwise ordered by the court, the banking institution shall release the funds to the judgment debtor.
  • The provisions for claiming exemptions do not apply when:
    • The state of New York, or any of its agencies or municipal corporations is the judgment creditor; or
    • If the debt being enforced is for child support, spousal support, maintenance or alimony.
    For either of these exceptions to apply, the restraining notice must contain the following notice, in sixteen point bold type:
    “The judgment creditor is the state of New York, or any of its agencies or municipal corporations, AND/OR the debt enforced is for child support, spousal support, maintenance or alimony.”

If funds in a bank account are not deemed to be exempt, or the debtor does not claim an exemption, the creditor's attorney will serve an execution on the sheriff's office, or a New York City Marshal, directing them to levy on the bank account. The sheriff will then make a demand on the bank to turn over the funds in the account. After the sheriff or marshal has obtained the funds, they will then turn over the amount collected to the creditor's attorney. The sheriff or marshal will also add additional fees for their services to the amount seized.

If you have a joint bank account, banks will not turn over funds held in the account without a court order, which creditors rarely obtain.

The restraining notice is effective for one year. If the funds in your account have not been turned over to the sheriff within the year, then the restraining notice expires and you will be able to access the account.


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Remedies for Frozen Bank Accounts in New York

Debtors who have had their bank accounts frozen in New York have three options to protect the funds in their account.

  1. If some or all of the funds in the account are exempt, follow the above procedure to claim the exemption.
  2. Vacate the judgment, if the judgment was obtained on default. This is done by filing an order to show cause in the court that issued the judgment. There are various grounds to vacate a judgment. The most common is that the debtor was not properly served or did not receive the summons in time to defend the action.  If the judgment is vacated, the account will be released and any money seized will be returned. Read more about vacating default judgments in Long Island.
  3. File for bankruptcy. If the judgment is large, or you have other debts, you may want to consider filing for bankruptcy. Once a bankruptcy petition is filed, your bank accounts must be released. Under certain circumstances, funds of $600 or more that have been seized from your bank account can be recovered if you file for bankruptcy within ninety (90) days from the date that the money was seized.

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Debtors Outside of New York

Due to the 2009 decision by the New York State Court of Appeals in Koehler v. Bank of Bermuda, judgment creditors can restrain bank accounts belonging to out of state debtors if the account is  in a bank with a branch in New York State. This only applies to judgments that have been entered in New York State. The most common situation is one where a judgment is entered against a New York resident who subsequently moves out of state. If you are aware that a judgment has been entered against you in New York, and you live out of state, you should use a local bank that does not maintain a branch or an office in New York.  However, keep in mind that the New York judgment can be entered in the state in which you reside, although the specifics of how this is done will depend on the laws of the state that you live in.


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Long Island Frozen Bank Account Resources

10th Judicial District – Nassau County – The Nassau County District Court governs civil matters seeking up to $15,000 in damages. The court has jurisdiction over all of Nassau County. The court is located at:

99 Main Street
Hempstead, NY 11550
Phone: (516) 572-2355

10th Judicial District – Suffolk County – The Suffolk County District Court governs civil matters seeking up to $15,000 in monetary damages. The court has jurisdiction over all of Suffolk County except for the East End towns. There are six districts that handle civil cases.

Suffolk County Clerk’s Office – Debtors can search for judgments entered in Suffolk County on this website. The Suffolk County clerk’s office can be contacted at:

310 Center Drive
Riverhead, New York 11901
Phone: (631) 852-2000

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Andrew M. Doktofsky, P.C. | Long Island Frozen Bank Account Attorney

Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600, for a free consultation about frozen bank accounts throughout Suffolk County and Nassau County, New York. Andrew Doktofsky is an experienced consumer lawyer in Long Island who can assist you with default judgments and frozen bank accounts.