Spring has sprung and while the snow and ice may have melted, the truth may not be the same for your bank account. Having your bank account frozen is both embarrassing and can cause considerable unexpected financial problems – especially if your pay goes into the account and you have bill payments set-up on pre-authorized withdrawal.

When it comes to getting a frozen bank account unfrozen, your options depend on who froze it to begin with. Here are the most common types of frozen bank accounts:

• Account was frozen because a creditor obtained a judgement from the court with respect to a debt and has frozen the account accordingly.
• Account was frozen by Family Responsibility – you have a very big problem here.
• Account was frozen by Canada Revenue Agency. This is another big problem – CRA doesn’t need to go to court or get a court order against you to freeze your bank account.

Here are your options:

1. Pay the debt you owe – through your savings, investments, assets or financing.

2. Contact the other side and try to negotiate an arrangement that is satisfactory so that they voluntarily lift the freeze – good luck once a freeze is in place.

3. Go to court and ask a judge to lift the freeze on your account. This option is costly unless the enforcement action relates to a judgement obtained in small claims court. If this is the case, you can represent yourself. You can technically represent yourself in family court and tax court but it is not recommended.

4. Make a proposal. Making a proposal to your creditors immediately stays any collection action and will immediately see a frozen bank account unfrozen. In a consumer proposal, your creditor(s) is offered a sum to settle your debt with a monthly repayment schedule over 5 years. At the end of 5 years, the debt would be paid in full (the consumer proposal can actually be paid at any time). The only circumstances in which a consumer proposal cannot unfreeze a bank account is if it relates to unpaid Family Responsibility or if it is related to some form of fraud on the government that is not protected by a proposal.

Some people are surprised to learn that a consumer proposal can actually stop CRA collection action, such as a frozen bank account, as most perceive CRA as the almighty creditor.

If your bank account is frozen, your options are clear. If there was money in the account you need to act fast as often the bank will hold the money in your account for a number of days, or if remitted to the court, the court may also hold the funds for a period of time before they are given to the other side.

Find out more about getting a frozen bank account unfrozen by calling DebtCare Canada today. We can help: 1-888-890-0888.