Frozen Bank Accounts in Georgia: What Businesses and Individuals Can Do When a Bank Seizes Their Funds

One day your account works fine. The next day your debit card gets declined and you can’t figure out why. If you’ve ever logged into your bank account and found it frozen, you know how unsettling that feeling is. Bills are due, payroll might be coming up, and suddenly you have no access to your own money. So what happened, and what can you actually do about it?

When Does a Bank Freeze Your Account in Georgia?

A frozen account usually happens for one of a few reasons. A creditor who already has a court judgment against you may have requested a garnishment or levy on your funds. The bank itself may have flagged unusual activity. Or a government agency, like the Georgia Department of Revenue, may have issued a levy to collect unpaid taxes.

Garnishment in Georgia is governed by O.C.G.A. § 18-4-1 et seq. Once a creditor gets a judgment and follows the proper garnishment process, a bank holding your funds can be ordered to turn money over to satisfy that debt. The Georgia Department of Revenue can also issue what’s called a notice of delinquency, which freezes funds for up to thirty days at a time while the state decides whether to pursue a levy.

Why Does This Hit Businesses So Hard?

For an individual, a frozen account is stressful. For a business, it can be catastrophic. Think about it: how do you make payroll if your operating account is locked? How do you pay vendors or keep the lights on? Even a short freeze can damage relationships with employees and suppliers who don’t care why the money isn’t there, only that it isn’t.

Businesses often get hit with bank account freezes tied to disputes they didn’t even know were happening, like a lawsuit filed months earlier that resulted in a default judgment. By the time the bank notifies anyone, the damage is already underway.

What Should You Look For When This Happens?

If your account gets frozen, there are a few things worth checking right away:

• Ask the bank for written documentation explaining why the account was frozen
• Determine whether the freeze stems from a court order, a government levy, or the bank’s own internal review
• Check whether any of the funds in the account might be exempt, since certain types of income receive special protection under Georgia and federal law
• Note all deadlines mentioned in any paperwork you receive, since garnishment and levy proceedings move on tight timelines

Georgia law does carve out certain protections, including exemptions for some federal benefits like Social Security. Whether those protections apply to your situation can depend heavily on the specific facts involved.

Don’t Face a Frozen Account Alone

A frozen bank account can feel like the ground dropping out from under you, whether you’re trying to run a business or just trying to pay rent. The rules around garnishment, levies, and exemptions in Georgia are detailed, and the timelines can move fast. If your funds have been frozen and you’re not sure why or what comes next, our Atlanta banking litigation attorneys at Evans Law can take a look at your situation and help you understand your options. Contact Evans Law today for a consultation.

Source:

law.justia.com/codes/georgia/2020/title-18/chapter-4/article-1/section-18-4-4/