If your bank account has been frozen, your first move is a phone call to the bank to find out who ordered the freeze and why. That single fact decides everything else: whether you fix this by handing your bank a document, by filing a motion in court, by requesting a hearing with the IRS, or by petitioning the Treasury Department. Deadlines are already running from the date on any notice you received, and some of them are short.
The First Hour: Calls, Notices, and Cash Flow
Call the bank and ask the representative to identify the source of the restriction. Is it an internal compliance hold, a court-ordered garnishment, a government levy, or a sanctions block? Banks can usually tell you which category applies even when they can’t share every detail. Get the name and direct number of whoever is handling the case, whether that’s a compliance officer or someone in the legal department. Branch tellers and general customer service reps rarely have authority to lift a hold.
While you have someone on the line, ask whether any portion of your funds is still accessible. Certain deposits are protected by federal rules, and some freezes only affect balances above a threshold. Then check your mail. An IRS levy has to be preceded by written notice at least 30 days before the levy takes effect.1Office of the Law Revision Counsel. 26 U.S. Code 6331 – Levy and Distraint A court garnishment comes with paperwork explaining your right to contest it. Those notices contain the deadlines you’ll need to hit.
Now protect the rest of your life. Automatic payments, rent, insurance premiums, and other recurring charges will bounce. Contact those payees before late fees pile up. Accounts you hold at other banks are typically unaffected unless the freeze order specifically names them, so route what you can through those.
Who Froze the Account
Freezes come from three places, and the response is different for each.
Government agencies. The IRS is the most common federal source. When you owe back taxes, it can levy your account under its authority to seize property.1Office of the Law Revision Counsel. 26 U.S. Code 6331 – Levy and Distraint The Treasury Department’s Office of Foreign Assets Control (OFAC) blocks assets tied to anyone on its Specially Designated Nationals and Blocked Persons (SDN) List.2Office of Foreign Assets Control. Basic Information on OFAC and Sanctions The DEA, FBI, and other agencies can seize accounts they believe hold proceeds of criminal activity, triggering civil or criminal forfeiture.
Courts. A creditor who wins a lawsuit can obtain a garnishment order that compels your bank to restrict funds. Divorce courts routinely freeze marital assets during proceedings. Fraud and breach-of-trust cases often produce similar asset-protection orders. Only the issuing court can lift a court-ordered freeze; the bank has no discretion.
The bank itself. Large or unusual deposits, patterns that look like possible money laundering, outdated identity information, or the death of an account holder can all prompt an internal hold. Processing errors and failed electronic transfers cause the more mundane version.
Fixing a Bank-Side Hold
Administrative holds placed by the bank are usually the fastest to resolve because you’re dealing with the institution directly. The key is finding out exactly what the bank wants and providing it.
Identity and Compliance Documentation
If the hold stems from outdated or incomplete identity verification, expect to provide a current government-issued photo ID and proof of address such as a recent utility bill. If the bank is doing enhanced due diligence on a large deposit, it may ask for documentation showing the source: wire confirmations, closing statements from a real estate sale, pay stubs, or similar records.
Death of an Account Holder
When the bank learns a customer has died, it freezes the account until someone with legal authority to act for the estate presents the required paperwork. That means a certified death certificate plus court documents naming an executor (Letters Testamentary, if there was a will) or administrator (Letters of Administration, if there wasn’t). Joint accounts with survivorship rights are the exception; the surviving co-owner can typically continue using the account after presenting a death certificate.
Suspicious Activity Reviews
If the hold traces back to a suspicious activity report (SAR) or an anti-money-laundering review, the bank cannot tell you a SAR was filed and you cannot directly challenge the SAR itself. Federal law prohibits banks from revealing a SAR’s existence to the account holder.3Financial Crimes Enforcement Network. FinCEN Advisory FIN-2012-A002 – SAR Confidentiality Reminder What you can do is give the compliance department a clear, documented explanation of the questioned transactions: invoices, contracts, tax returns, business records. Ask for the name of the compliance officer on your case and a timeline for the review. If the bank ultimately closes your account after the review, you’re entitled to your funds, though the bank may issue a cashier’s check rather than allow electronic transfers.
Processing Errors and Deposit Holds
Some restrictions are just bank error: a posting mistake, a failed transfer, a duplicate transaction. Those usually clear within a few business days once identified. If the issue is a hold placed on a deposited check, federal regulations set maximum timeframes for how long banks can delay access, with limited exceptions for new accounts, deposits over $6,725, and checks the bank has reason to doubt.4HelpWithMyBank.gov. Are There Exceptions to the Funds Availability (Hold) Schedule?
The IRS Levy Clock: 21 Days
When the IRS serves a levy on your bank, the bank doesn’t immediately turn the money over. Federal law requires the bank to hold the funds for 21 days before surrendering them.5Office of the Law Revision Counsel. 26 USC 6332 – Surrender of Property Subject to Levy That window is when you have to act. Once it closes, the money leaves.
Request a Collection Due Process Hearing
You have 30 days from the date on your levy notice to request a Collection Due Process (CDP) hearing.6Office of the Law Revision Counsel. 26 USC 6330 – Notice and Opportunity for Hearing Before Levy File IRS Form 12153 and send it to the address on the levy notice (not the payment address), with a copy of the notice attached. A timely CDP request stops collection while the hearing is pending and preserves your right to challenge the outcome in Tax Court. State a reason for the dispute, and if you’re proposing an alternative arrangement, attach a financial statement (Form 433-A for individuals, Form 433-B for businesses).7Internal Revenue Service. Form 12153, Request for a Collection Due Process or Equivalent Hearing
Miss the 30 days and you can still request an “equivalent hearing” within one year, but it doesn’t stop collection and it forfeits Tax Court review. The difference between day 29 and day 31 is enormous.
Ask for a Hardship Release
If the levy prevents you from covering basic living expenses like rent, food, or medical care, call the IRS and request a hardship release. The IRS is required to release a levy that creates economic hardship.8Office of the Law Revision Counsel. 26 USC 6343 – Authority to Release Levy For wage levies that release is mandatory; for bank account levies the IRS has more discretion but can still lift the hold.9Internal Revenue Service. What if a Levy Is Causing a Hardship Call the number on your notice, be ready to detail income, expenses, and dependents, and have your bank’s fax number so the IRS can send the release directly.
Propose a Payment Alternative
Even without a hardship claim, the IRS may release a levy if you agree to an installment agreement or an offer in compromise. A spouse who wasn’t involved in the tax debt can also pursue innocent spouse relief. Any of these can lift the levy once the IRS approves the arrangement.8Office of the Law Revision Counsel. 26 USC 6343 – Authority to Release Levy
Federal Benefits and IRS Levies
One important boundary: the automatic protection for directly deposited Social Security and VA benefits applies to private-creditor garnishments, not IRS levies. Federal tax debts can reach Social Security and most other income that private creditors cannot touch.10Office of the Law Revision Counsel. 26 USC 6334 – Property Exempt From Levy
Responding to a Court Garnishment
When a court orders your bank to freeze funds for a creditor, your response goes through the court that issued the order. The bank cannot override it.
The garnishment notice should explain your right to file an exemption claim or challenge the order. If the debt is already paid, the amount exceeds what you owe, or the creditor didn’t follow the correct procedure (proper service, mandatory waiting periods), file a motion asking the court to release the funds. Procedural defects can invalidate an order.
Even when the debt is legitimate, much of your money may be exempt. If you receive Social Security, VA, or other federal benefits by direct deposit, federal regulations require your bank to review the account when a garnishment order arrives and protect two months’ worth of directly deposited federal benefits automatically, without any filing on your part.11eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments12Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits, Like Social Security or VA Payments? Anything above that two-month floor can still be garnished, and reclaiming it means going to court to argue the excess is also exempt under state or federal law.
For any exempt funds swept into the freeze, file a motion for release of exempt funds with the issuing court and document the source, such as bank statements showing direct deposits from the Social Security Administration or the Department of Veterans Affairs.12Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits, Like Social Security or VA Payments?
Divorce-related freezes work through the family court. If the court froze marital assets to preserve them during the case, file a motion showing you need access to specific funds for living expenses or legal fees. These motions are common and courts grant them regularly when the need is genuine.
If Your Money Has Been Seized for Forfeiture
Forfeiture is among the most aggressive government actions against your money, and the deadlines are short.
Civil Forfeiture
In civil forfeiture the government files against the property itself, not against you. To contest, file a claim of interest with the seizing agency by the deadline stated in your notice, which can be as short as 35 days from the date of the notice letter.13Office of the Law Revision Counsel. 18 U.S. Code 983 – General Rules for Civil Forfeiture Proceedings If you don’t receive the personal notice letter, the deadline is 30 days after the final publication of the seizure notice.14Forfeiture.gov. Filing a Claim Missing these deadlines usually means losing the property by default.
Once you file, the government must file a complaint in court and the case proceeds like any civil lawsuit. The central defense is the innocent owner defense: if you can show by a preponderance of the evidence that you didn’t know about the illegal conduct that led to the forfeiture, or that you took reasonable steps to stop it once you found out, the court must return your property.15Office of the Law Revision Counsel. 18 USC 983 – General Rules for Civil Forfeiture Proceedings
Criminal Forfeiture
Criminal forfeiture happens inside a criminal prosecution: the defendant’s property is forfeited upon conviction. If you’re a third party with a legitimate ownership interest but no involvement in the crime, petition the court through an ancillary proceeding within 30 days of the publication of the forfeiture order. The petition must be signed under penalty of perjury and describe the nature, extent, and timing of your interest. At the hearing you’ll need to prove either that your interest was superior to the defendant’s at the time of the crime, or that you were a good-faith purchaser with no reason to believe the property was subject to forfeiture.16Office of the Law Revision Counsel. 21 U.S. Code 853 – Criminal Forfeitures
OFAC Sanctions Blocks
Being on an OFAC sanctions list, or having funds caught in a sanctions-related block, is not something you fight in court. You work directly with the Treasury Department.
If you need access to blocked funds for a specific purpose, apply for a specific license from OFAC. Applications go through OFAC’s online licensing portal or, if unavailable, by mail using Form TD-F 90-22.54.17eCFR. 31 CFR 501.801 – Licensing Disclose every party involved and include documents explaining why the transaction should be permitted.2Office of Foreign Assets Control. Basic Information on OFAC and Sanctions
If you believe you were listed on the SDN List in error, or the circumstances behind the listing have changed, petition OFAC for removal by email at OFAC.Reconsideration@treasury.gov. Include proof of identity, the specific listing as it appears on the SDN List, the date of the listing action, and a detailed explanation of why the designation should be reversed. OFAC typically acknowledges receipt within seven business days and may send questionnaires within 90 days. The process often takes many months. You can also request a courtesy document identifying the unclassified information behind your designation so you know what you’re arguing against.18Office of Foreign Assets Control. Filing a Petition for Removal From an OFAC List
When You Share the Account With the Person Who Owes the Debt
Joint accounts are especially vulnerable. A garnishment or levy targeting one co-owner typically freezes the entire account, including money that belongs to the other co-owner who owes nothing. Most jurisdictions presume joint holders have equal rights to all funds, so a creditor of one co-owner can potentially reach the whole balance.
If you’re the non-debtor co-owner, the burden is on you to prove which funds are yours. Gather deposit records right away: pay stubs, direct-deposit records, and bank statements that trace specific dollars to your own deposits. File a motion with the court or contact the levying agency to claim your portion. Commingled funds get harder to trace the longer you wait.
Some married couples who hold accounts as “tenants by the entirety” have stronger protection: in states that recognize it, a creditor of only one spouse generally cannot reach the joint account. It doesn’t apply to joint debts and the account has to be specifically designated. Adding a non-spouse to your account, such as an adult child or elderly parent, gives you essentially no protection and can expose your money to their creditors.
When to Bring in a Lawyer
Plenty of freezes can be resolved without counsel, especially bank-side holds where the fix is producing documents. Some situations demand a professional. IRS offers in compromise involve complex financial analysis. Forfeiture proceedings have short deadlines and permanent consequences for missing them. OFAC cases sit in a specialized corner of sanctions law where experience matters. If you’re facing a criminal investigation, or a freeze involving more than a few thousand dollars, a consultation almost always costs less than a procedural mistake that forfeits your right to challenge the freeze at all.