What Does It Mean To Freeze Assets And Bank Accounts?
Financial assets and bank accounts are properly operated and regulated by the state government in any country. They ensure that every transaction and activity takes place for a fair purpose.
What Does It Mean To Freeze Assets And Bank Accounts?
“Freeze assets and bank accounts” means freezing or blocking financial assets and bank accounts and their transaction for legal purposes. Banks, Governments, and other legal authorities can restrict a person or an organization from doing transfers or withdrawals for legal and investigation purposes.
If an account is frozen by the authorities the account holder is still able to receive the deposits but the transfers and withdrawals from the account are restricted.
The followings are major reasons why financial accounts are blocked or frozen by the legal authorities:
- When there is a legal proceeding such as a court case and liquidation
- When legal authorities doubt someone to involve in criminal activities, authorities can request to freeze the financial accounts for the purpose of criminal investigations
- In the condition of insolvency or bankruptcy of an entity, financial accounts are restricted to give a chance to the lenders and creditors to recover their money
- If a person or an organization is involved in financial help to the terrorist, authorities block those accounts to prevent the terrorist funding and their activities
- When an individual or an organization does not pay legal taxes to the government
- If unusual events or transactions take place in your account, a bank can restrict the account to ensure whether the transactions are taken place by the right account holder or not, etc.
What Need To Be Done After Frozen A Bank Account?
If someone faces this issue, the best solution is to contact your bank as soon as possible and check all the details of your bank account along with the transaction history.
If your account is blocked because of tax liability, it is better to pay your debts and request the bank to unfreeze the account.
If your bank account is frozen by legal authorities because they suspect you of illegal activities or terrorist funding, the best solution is to give the proper evidence about each transaction that you have done and show that those all transactions are done for fair purposes and request to unfreeze the account.
How To Avoid From Freezing The Bank Account
If you want to keep your bank account active and safe it is better to keep yourself up to date. The followings are the major ways through which one can avoid freezing their bank accounts:
- Keep an eye on debt collectors and pay your all liabilities on time, especially the legal taxes
- Keep a proper record of your transactions (Bills and invoices are essential to maintain because these are the evidence of using money in the right or wrong place)
- Pay your debts before their deadlines (It also improves your credibility)
- Always keep a positive balance in your account, it will help the bank to know that the account is live and working, etc.
FAQs
Are Legal Authorities such as banks and state governments can block the bank account without the account holder’s permission?
Yes, authorities can block anyone’s account if they suspect illegal or terrorist activities done from the account.
What are the two rules for freezing a bank account?
- If an account holder involves in illegal or unlawful activities
- If a lender or a creditor has court permission for suspending a bank account
What is an example of a frozen asset?
A residential or primary house is an example of a frozen asset because it does not provide any income.
Can I withdraw money from the frozen account?
Once the account is frozen or blocked, withdrawal of money will not be allowed.
Is it possible to deposit the money in a frozen bank account?
Yes, deposits can be made in a frozen account but withdraw and transfer of funds are restricted in a frozen bank account.
Can I open another bank account if one is frozen?
Yes, you can open another bank account but make sure that you don’t owe the money to the bank where you are going to open an account.