A frozen account is a bank account in which no activity is allowed to take place. The account will not be unfrozen until the account holder corrects the problem which led to the account freeze in the first place. The classic reason for a bank account to be frozen is a lien on the account from a creditor. Creditors can freeze accounts until they are paid, although they cannot take money out of an account without a court order which authorizes them to do so.
When someone has a frozen account, it is not possible to make withdrawals from the account. Purchases cannot be charged to the account and checks written on it will not be honored. The bank must send a notice to the account holder informing him or her of the freeze and providing information about the bank's legal department so that the account holder has contact information to discuss the situation. It is advisable to alert people who are holding outstanding checks to wait so that they do not deposit the checks and receive a charge because the check could not be cleared.
If an account has been frozen by a creditor, the account holder will need to pay the creditor or work out the terms of a payment agreement before the creditor will release the lien and allow the account to be unfrozen. People who cannot figure out why their accounts have been frozen can contact the bank's legal department to get information about a frozen account, including who placed the lien on the account and the amount of the lien.
Rarely, accounts are frozen by accident. A glitch in the bank system may result in a freeze order being applied to the wrong account, or an error in the legal process may result in a freeze which is not actually authorized. In these situations, providing proof that there is an error should allow the bank's legal department to unfreeze the account.
Governments may also freeze accounts. An account can be frozen if it is connected with a criminal investigation or, in some countries, if there is proof that it is being used to supply funds to terrorist groups. In these cases, a frozen account may also be subject to seizure, with the government seizing the funds on deposit in accordance with laws which allow it to do so. If the funds in a frozen account are at risk of forfeiture, information will be provided to the account holder.
