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Removing Hold from Checking Account

My paycheck is direct deposited to my checking account. The bank put a hold on my funds, so I cannot use my debit card or cash a check. They are telling me that based on my account activity they can hold my cash. Is that true? Is there anything that I can do to get this hold off of my account and access my funds?

The "account activity" must translate into a debt owed. Either the bank is owed money and they are exercising their rights to setoff, or some entity has used the legal system and effectively garnished your deposit balance. Either way, the bank should be able to explain to you that it is them collecting fees owed, a loan or overdraft, or that another entity is collecting money you owe them. Sometimes the IRS, as an example, would claim rights to funds in an account. The IRS would notify that person. The bank is in the position of having to act on a legal order. In that instance, the IRS had the obligation to send notice and they won't do it until after funds are being held.

Your other option is to get an attorney and to answer any claims on your money, if you dispute their claim. You should be looking to the root of the problem: who wants your money and why, in order to resolve this. Otherwise, you may move your direct deposit and the same process will follow you there. If you can communicate with the collector, you may be able to make arrangements for payments and get enough money to pay your bills, or otherwise straighten out this problem.

Published on 2/08/08