About Freezing of Bank Accounts During a Divorce

By Mike Broemmel

Divorce is part of state, not federal, law; thus, divorce requirements vary from one state to another. The procedures in one state are not the same as those in another. Nonetheless, all states maintain a process to protect property owned by a married couple at the start of and during divorce proceedings. This includes money in the bank.

Automatic Restraining Orders

Some states issue an automatic or temporary restraining order at the start of a divorce case. Assuming that such an order freezes a bank account is a mistake. Rather, such orders only require spouses to use money in their bank accounts for necessities. The automatic order also directs them not to dissipate or waste money in their bank accounts, as well as other assets. In many cases, the automatic restraining order provides sufficient protection to the divorcing couple. However, this is not always the case.

Request Account Freezing

If you believe freezing a bank account is necessary to protect your financial interests, you must file a specific motion with the court requesting that type of order. Your motion must specifically spell out the reasons why you believe the funds are at risk in the absence of an order freezing the account. Some states require that you state your allegations in the form of an affidavit, signed under oath.

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Burden of Proof

You bear the burden of presenting compelling evidence to support your motion to freeze a bank account. The burden imposed requires you to demonstrate that it is more likely than not your spouse will misuse the funds in your account, to your detriment, if no freeze order is issued by the court. The court will typically conduct a hearing on the motion unless you and your spouse enter into a mutual, written agreement to freeze the noted accounts.

Time Frame

Judges rarely issue open-ended orders freezing bank accounts. At the judge's discretion, an order includes a specific date on which it expires, unless renewed by court order. In the alternative, the judge may set a specific date for a follow-up hearing to review whether the freeze order should remain in force. Either party can file a motion to lift the freeze at any time after it is initially issued by the court.

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Are Savings Accounts Frozen During a Divorce in North Carolina?

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Bankruptcy & Frozen Bank Accounts

Bankruptcy can offer a financial clean slate to debtors, but many debtors are concerned about what will happen to their assets and accounts after they file. Bankruptcy laws protect debtors against many actions by creditors once the debtor files for bankruptcy, though creditors are not bound by those rules prior to the debtor filing his bankruptcy case.

What Happens to Judgments in Bankruptcy?

If a creditor wins a money judgment against you, that judgment may or may not be subject to discharge in bankruptcy. How judgments are treated in bankruptcy court depends on the type of debt you owe, not merely on the fact that a creditor won a judgment. Certain debts are not discharged in bankruptcy, and judgments on those debts will not be discharged either.

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