Well, you can file at any time. There isn’t any restriction as to when you may declare bankruptcy. But the more optimal question is: How long do I have to get my money back after the creditor has levied my account? The answer to this is more definite, as you will see.
To begin with, the only way that a creditor can levy (or ‘freeze’) your bank account is if they first get a judgment from the court saying that they can. Typically, that comes initially in the form of a breach of contract action filed by the creditor. Then you have to be properly served with a summons, which notifies you of the action taken against you, the amount of time you have to respond, the date on which the hearing will be held, and other disclosures. Then the hearing must take place, and the judge must order that the creditor has the right to levy an account in your name.
Assuming that all of this takes place, the creditor then has the ability to do things like garnish wages, levy bank accounts, and/or put a lien against some piece of property that you own (like your home). If it is a levy that occurs, then you will receive from either the bank or the creditor a notification after the freeze has taken place (but not before; obviously they do not want to give you a heads-up beforehand so that you can take all the money out of the account). On this document will be a ‘Return Date’. This is usually 21 days after the levy was executed. The return date is important, because it is during this period of time that the bank will hold onto the money that is in your account, and will not send it out to the creditor until the 21 days have passed. It is during this period of time that you can make any kind of dispute about ownership of the account, or prove that the funds held within the account are exempt (such as social security income).
If you file a St. Louis Chapter 7 bankruptcy or a St. Louis Chapter 13 bankruptcy, before the Return Date, you can get the money that had been frozen back from the back (and before it is given to the creditor). But if you wait until after the return date, the chances of ever getting the money back are slim to none. The other thing that you should be aware of is that if you have automatic deposits made into your bank account (for things like paychecks), then that money will be set aside for the creditor as well. So if possible, it is always advisable to inform your payroll department that you wish to receive a hard check for the foreseeable future (or at least until the account levy is released).
The affordable St. Louis bankruptcy attorneys at The Law Office of Jennifer Alter-Rieken have been making sure that our clients keep the money that they make (or assets that they own) out of the hands of the creditors. Our goal is to get the creditors and debts you don’t want discharged, while allowing you keep all the property that you want to retain, and do it all at an affordable price. All phone conversations and office consultations are free of charge.