A frozen bank account can be very annoying and alarming at the same time. In fact, it could make you feel frustrated especially when you own a business and there are many money and sales transactions that are needed to do. In addition, it can also embarrass you when people or clients know about what is happening. When your bank account is frozen, there are possible reasons to this, and each of these issues needs a specific solution. In this article, we will provide you the top three reasons why your bank account has been frozen, and what can you do about them.
Before we proceed to this main content of this article, let us understand what it means and entails having a frozen bank account. When your bank account freezes, it means that there are issues you need to solve or someone/ a company has a judgment against you over an unpaid debt. This affects in a way that the bank will suspend you from doing bank transactions using your card and account. Although certain conditions may allow you to access the account, there are surely several limitations to it.
- Illegal or Suspicious Activity – bank accounts have the full discretion and authority to freeze your account if they suspect you conducting malicious or illegal activities. This followed after the bombing of the twin tower or popularly known as the Sep 11 terrorist attacks. Banks monitor accounts for suspicious activity such as money laundering. This is done by depositing large sums of money that are generated through criminal activity to accounts and to move the money around to create an impression that the money comes from a legitimate source. Another thing is when you have cash bad checks. When you regularly do bad checks, this will be interpreted as a fraud. In most cases when an account has large and unusual deposits, this will alarm the banks and might impel them to freeze your account.
- Unpaid Debts to the Government – debts can be in a form of taxes or government loans. When you have unpaid taxes or student loans, the bank account is required by the government to freeze your bank account until you settle with your taxes and loans. Besides these, the government still does have several things that can impose against you if you do not follow the laws.
- Unpaid Debts to the Creditors – creditors, small or big companies do have the right to file a complaint against you that can induce your bank account to freeze your account, provided that they are able to provide certain important documents to prove their claims. This means that they cannot freeze your account when they still do not have an approval from the court. When you avail of a loan, the lending companies will ask you certain conditions that you need to follow and abide by.
NOTE: in the chance that your account has been frozen because of malicious activity or debt to the government or creditors, your bank account should not be wiped out clean of funds. Froze means transactions are paused but it does not provide the authority to the bank to obtain your cash.