Debt Defense: Tips & Hacks 2 (Frozen Bank Accounts)

Exemption law has been at the forefront of this week's Facebook posts. New York's Exempt Income Protection Act, which went into effect on January 1, 2009, established procedures for releasing funds that are deemed exempt from the reach of creditors. Below is a list of important tips and hacks.

  • Here's a broad list of New York exempt property.
  • Here's an explanation of how to release a frozen bank account containing exempt funds.
  • 90% of wages[1] earned within the last 60 days are exempt.
  • $2,100 is automatically exempt as a minimum threshold.
  • The bank may not combine the amounts of multiple accounts for purposes of applying the minimum exemption of $2,100 or the $2,750 exemption (when any discernible direct deposit from an exempt source was made in the last 45 days). The exemption minimums are applied to each account separately.
  • Do not commingle exempt funds with non-exempt funds. It is much more difficult to release a commingled account. Place exempt funds in a separate account.
  • Judgment debtors should remove joint account holders to avoid the risk of a bank freeze on the entire amount in the account, which the bank has the right to do.

If you're experiencing a sudden bank freeze by a creditor, contact us right away.



[1] Income from personal services. Arguments can be made as to what constitutes such income.

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