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Georgiou Law, PLLC

Bank Restraints

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Bank Restraints In New York

How they work, what income is exempt, and how Georgiou Law gets your money released and leverages the situation to settle your debt.

What is a Bank Restraint?

A bank restraint (sometimes called a “freeze”) is a creditor’s enforcement step under CPLR Article 52. After a money judgment, the creditor’s lawyer can serve a restraining notice on your bank.

The restraint temporarily blocks you from accessing funds while the creditor pursues a turnover or levy. New York’s statute sets the form and effect of a restraining notice and limits how often banks can be restrained. (NYSenate.gov)

What Happens Step-By-Step

  1. Service and required forms. When a creditor restrains a bank account, the creditor must give the bank: the restraining notice, an Exemption Notice, and two Exemption Claim Forms. If those aren’t served together, the restraint is void and the bank must not restrain the account. (Justia Law)

  2. Bank’s mailing to you. Within two business days of receiving the restraint and forms, the bank must mail you the Exemption Notice and two claim forms. (Justia Law)

  3. Your deadline. You have 20 days from the postmark on the bank’s envelope to send the completed Exemption Claim Form to both the bank and the creditor (or its attorney). (Justia Law)

  4. Fast release with proof. If you include proof that all funds are exempt (for example, benefit award letters or two months of bank statements), the creditor must instruct the bank to release the account within seven days. (Justia Law)

  5. Default release if no objection. If the bank gets your claim form, it must release the funds eight days after receipt unless the creditor objects. If the creditor objects, it has eight days to move for a hearing; the court must hold the hearing within seven days after service and issue an order within five days. (Justia Law)

  6. Court safety valve. Even outside the exemption process, the court may modify, condition, or limit any enforcement procedure for fairness (CPLR 5240). (Justia Law)

What Money is Exempt from Restraint or Execution?

Under state and federal law, certain funds are exempt. New York’s required Exemption Notice lists, among others: Social Security (retirement and SSD), SSI, public assistance, veterans’ benefits, unemployment insurance, payments from pensions/retirement accounts, disability benefits, 90% of wages earned in the last 60 days if needed for support, workers’ compensation, child support, spousal support/maintenance, railroad retirement/black lung benefits, and certain COVID-19 relief. (Justia Law)

Federal law separately protects Social Security benefits from most private collection. (Legal Information Institute) And federal regulations require banks to automatically protect a “protected amount” equal to up to two months of directly deposited federal benefit payments—no claim form needed just to access that protected amount. (Legal Information Institute)

Automatic “Baseline” Protections In New York

Minimum-wage formula: A New York restraining notice may not apply to an amount equal to or less than 240 times the applicable federal or state minimum hourly wage (whichever is higher). Example for 2025: NYC/Long Island/Westchester minimum wage is $16.50/hour, so 240×$16.50 = $3,960; elsewhere in New York it is $15.50/hour, so 240×$15.50 = $3,720. (NYSenate.gov, Department of Labor, The Official Website of New York State)

Personal-property “cash” exemption: Separately, the statewide cash/bank-account exemption under CPLR 5205(l) is $3,425 for cases commenced on or after April 1, 2024 (periodically adjusted). (Department of Financial Services)

How Georgiou Law Gets Accounts Released—Fast

  1. Same-day triage. We review your judgment status, service history, bank history, and income sources to identify all exemptions and defects immediately.

  2. File the claim and send proof. We complete and serve the Exemption Claim Form right away and send the creditor’s attorney documentary proof to trigger the seven-day release requirement where all funds are exempt. (Justia Law)

  3. Push for automatic protections. We enforce federal “protected amount” rules for direct-deposited federal benefits and the state baseline protections tied to minimum wage—so you can access protected funds now. (Legal Information Institute, gov)

  4. Court relief if needed. If there’s an objection or hardship, we move under CPLR 5240 for a protective order to modify or lift the restraint and, where appropriate, challenge improper fees or non-compliance (for example, missing EIPA forms). (Justia Law)

  5. Settle from a position of strength. Once we prove your income is exempt or you’re judgment-proof, the creditor’s leverage drops. We negotiate written settlements or payment plans that fit your budget.

Your Leverage To Settle

Exempt or protected funds: If the creditor cannot reach your income or a baseline protected amount, their enforcement risk rises and settlement expectations often come down. (Legal Information Institute, NYSenate.gov)

Procedural defects: Missing EIPA forms can void a restraint; failures like these create risk for the creditor. (Justia Law)

Cost and delay: Creditors must meet tight timelines and risk fee exposure for bad-faith objections. (Justia Law)

Court oversight: Judges can limit harsh enforcement under CPLR 5240. (Justia Law)

Recent Result

After proving a client’s funds were exempt we obtained a full release of the restraint and negotiated a 45% settlement of the claim. Prior results do not guarantee a similar outcome.

What to do if Your Account is Frozen Today

  1. Don’t panic—and don’t ignore the mail. Watch for the bank’s Exemption Notice and claim forms. (Justia Law)
  2. Gather proof: benefit award letters, recent bank statements (last two months), pay stubs, pension/retirement statements. (Justia Law)
  3. Call Georgiou Law. We’ll file the Exemption Claim Form, send proof to the creditor’s attorney for a rapid release, and—if necessary—move the court to protect you. (Justia Law)

Frequently Asked Questions

Generally yes against private creditors, with limited exceptions (e.g., certain federal or support debts). Banks must automatically protect up to two months of direct-deposited federal benefits. (Legal Information Institute)

Not from the federally protected amount; banks may not charge a garnishment fee against it. (Legal Information Institute)

If you include strong proof with your claim, the creditor must direct a release within seven days; otherwise the bank releases in eight days unless the creditor objects, and any objection is fast-tracked for a hearing. (Justia Law)

Ready To Get Help?

Call Georgiou Law at (917) 764-3072 for a free consultation. We move quickly to release improper restraints and negotiate practical resolutions.

Clear Your Debt, Claim Your Future.

Legal notices:
• Attorney Advertising.
• This page provides general information, not legal advice. Laws and dollar thresholds change; we confirm the current figures for your situation. (Department of Financial Services, Department of Labor)