A bank may place a "freeze" on a consumer's bank account per court order, usually called a freezing injunction in the UK. It is a way for a creditor to collect money owed or to force the debtor to make payment arrangements. If a creditor suspects you are holding back the money you owe them then they can apply for a third party debt order to access your bank or building society. Although it may not be easy, a consumer may receive access to some of the funds in his bank accounts even when they are frozen.
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A creditor must file an injunction and obtain a judgment against you, as a debtor, from the court. The court will only grant an injunction if it considers that it is just and convenient to do. The court will take into account several factors, including: There is sufficient assets in existence to meet the claim; The applicant can show he has a good arguable case; The court must have jurisdiction; the applicant must have a cause of action – that is, an underlying legal or equitable right which may give rise to a judgment that can be enforced against the respondent's assets; there must be a real risk of the disposal or use of the assets and the applicant must provide an undertaking to the court to pay any damages to the other party if it is later shown that the injunction should not have been granted. The injunction can be filed with or without noitce to the subject. At this point, your account will be frozen but no money will be paid to your creditor until the judge has decided what to do at the final hearing. The final hearing should take place at least 28 days after the interim order is made.
Naturally if you cannot access your bank account then you will find it difficult to pay bills and survive on a day-to-day basis. If this is the case then you can make an application to court for a hardship payment order. Make the application on court form N244. You can download the form from the Ministry of Justice website www.justice.gov.uk. You will need to provide information including: copies of wage slips bank statements; mortgage account details; your rent book and any other documents which show your financial situation.
Breaching the terms of a freezing injunction opens a person or organisation up to proceedings for contempt of court. This is punishable by a fine, imprisonment or the seizure of the assets subject to the injunction.
Stopping the creditor's application
You may be able to convince the judge to deny the creditor's application. This will depend on several factors, including: If your money is in a joint account and the other account holder does not owe the debt; the debt is for a small amount; your account is overdrawn; the money in your account belongs to someone else or if your money is in a building society or credit union account and you'd be left with less than £1 if the debt were paid. You can also argue that a third party order is too serious a step and the debt could be paid off quickly by instalments.
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