Is it legal for a credit card company to freeze my bank account in Texas?

Question from Sue, Is it legal for a credit card company to freeze my bank account in Texas?

Answer from AI:

If a credit card company has obtained a judgment against you and subsequently frozen your bank account, it is important to understand the legal framework and your rights under Texas law. Here’s a general explanation of the situation and potential steps you can take.

Understanding Judgments and Bank Account Freezes

When a creditor, such as a credit card company, wins a lawsuit against you, they obtain a judgment. This judgment allows them to take certain actions to collect the debt, including freezing your bank account. However, there are specific rules and protections in place, especially for individuals who rely solely on certain types of income, such as pensions.

Exemptions for Pension Income

In Texas, certain types of income are generally protected from creditors. This includes:

• Social Security benefits
• Veterans’ benefits
• Disability benefits
• Retirement and pension benefits

If your bank account contains only these types of exempt funds, creditors typically cannot legally freeze or garnish these amounts. However, if your account contains a mix of exempt and non-exempt funds, it may be more complicated to protect your money.

Steps You Can Take

If your bank account has been frozen, here are some steps you can take:

1. Verify the Source of Funds: Ensure that your bank account contains only exempt funds. Gather documentation that proves the source of your income, such as pension statements.
2. Contact the Creditor: Inform the creditor that your account contains exempt funds. Provide them with the necessary documentation to prove this.
3. File a Claim of Exemption: In Texas, you can file a “Claim of Exemption” with the court that issued the judgment. This legal document asserts that the funds in your account are exempt from garnishment. You may need to attend a court hearing to present your case.
4. Consult with a Legal Professional: Given the complexity of these situations, it is advisable to seek legal advice. An attorney can help you navigate the process and ensure your rights are protected.

Resources and Legal Assistance

For more information and assistance, consider the following resources:

• Texas Law Help: Exempt Property and Asset Protection
• Consumer Financial Protection Bureau: Claim of Exemption

When to Seek Legal Advice

If you are unsure about the legal status of your funds or how to proceed, it is crucial to consult with a legal professional. An attorney can provide personalized advice based on your specific circumstances and help you take the appropriate legal actions to protect your income.

Remember, while this information provides a general overview, it is not a substitute for professional legal advice. Always consult with a qualified attorney to address your particular situation.