Wachovia Froze My Checking Account For Nearly A Month

Kate and her husband knew they had to settle a big debt to Capital One, but elected to wait until the bank came to them to pay up. The move ended up costing them, because Capital One got Wachovia to freeze their checking account with the assurance that it would release the funds once the couple paid up.

Except Kate and her husband did pay up in late November, but until yesterday, the checking account remained frozen. She explains:

I am really at the end of my rope, and I need help, big-time.

When my husband was younger, he was not the fiscally responsible adult he is today, and he got over his head with credit cards and private student loans. He and I have both worked very hard to become responsible with our money, but unfortunately, some mistakes have come back to haunt us.

Three years ago, Capital One won a judgment against my husband for a bad credit card debt for about $2,800. At the time, we didn’t have the money to pay, and so, being fairly stupid, we decided just to wait until they contacted us, and we’d work it out then. In the meantime, we both have worked really hard. We’ve advanced in our careers so that we’re finally living above poverty-level, and can actually afford to pay all of our bills AND eat, and we’ve managed to sock away some savings. We both have long commutes, and I work insane hours, but we do it so that we can square away the mistakes of our past and have a stable financial future.

So, of course, Capital One finally came calling.

This letter isn’t about them, though. They were owed money, and they had the legal right to get it through whatever means they could. The way they got it, was they got a Writ of Garnishment and got Wachovia to freeze our joint checking account until either a) we could pay off the amount with a certified check (which is now $4500 with all the legal fees, so THAT’S an expensive lesson) at which point they’d immediately send the paperwork to unfreeze the account, OR b) we could wait until enough of our paychecks direct-deposited that the lawyer retained on behalf of Capital One could recoup their money.

I had savings in a separate account (and an awesome mom who could float me until I could actually ACCESS the funds in my now-frozen checking account), so I opted for the “write a check, unfreeze the account, and move on with our lives” option. We did that, and the law firm representing Capital One immediately sent the paperwork to Wachovia letting them know that we had settled up, and our funds could be relinquished.

That was two weeks ago.

We understood it may take a few days; we know how legalities and bureaucracies work. But my husband has called Wachovia several times now, and keeps getting the same answer: “We don’t know where your paperwork is, we don’t know why your account is still frozen, and our legal department is very busy.”

I know we screwed up, and the start of this mess is our fault. But we have paid our debt, in full, to another entity that we were indebted to. We didn’t owe Wachovia anything, and yet they are the ones still holding our money hostage. Do you have any advice for us? Because at this point, I’m about ready to move into my local branch office with a sleeping bag until someone helps me.

And then Kate eventually regained access to her money:

We did finally resolve our issue with Wachovia, although I’m not sure HOW. We called their customer service line a dozen times, and the only response we got was that they hadn’t received the paperwork to release our account. This was completely erroneous, as not only had we sent it three separate times via fax, the lawyer that Wachovia retains to handle these types of incidents had faxed it to them AND overnighted it to them.

After nearly three weeks without access to our money (two of those weeks because Wachovia dragged their feet), we finally got our account unfrozen. I think it was possibly the three-pronged approach. In one day I emailed the CEO, went and parked myself at a branch and wouldn’t leave until they got someone from legal on the phone, and we told the lawyer that Wachovia retains that Wachovia was claiming he hadn’t sent paperwork that we knew he had sent, and we thought he should know they were scapegoating him. I’m not sure what finally got the ball rolling, but all I can say is that at 2pm that day, our account was still frozen, and legal was claiming they hadn’t received the paperwork, and that it would take at least another week to unfreeze the account once they HAD received the paperwork, and that at 7pm, the account was magically unfrozen.

I did receive a phone call from someone in the office of the CEO a full week after everything was resolved, in response to my email. However, they didn’t apologize for any of my trouble, just thanked me and hung up when I said my account was unfrozen. I have already opened a checking and savings account with another bank, and am in the process of switching everything over. Out of the probably twenty people we spoke to over 2 weeks, exactly two were helpful and/or remotely interested in our plight.

Has anyone been in a similar situation?

Comments

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  1. pecan 3.14159265 says:

    Oh dear Lord, that just seems like the worst case scenario of any situation. Just when you didn’t think it could get any worse, it does!

    I think in this case, it helps to have several accounts in various banks, just to spread out the money. This is of course, unless Capital One can get each of your accounts frozen, not just the accounts from only one bank.

    • treimel says:

      Capital One certainly has the right to go after all thre joint accounts in a situation like this.

    • AllanG54 says:

      Once someone has a judgment they can freeze all of your accounts and take the money from them as well. I was in collections for 14 years. Did it all the time.

  2. parkj238 says:

    Wait a second, how are Capital One and Wachovia related? I can understand if its the same parent company but if not, Is this legal?

  3. Grabraham says:

    It is legal because there was a court ruling finding in the favor of Capital One. Two years after the judgment Capital One got tired of waiting for the money the courts awarded them and got a judge to sign off on a Writ of Garnishment.

  4. Loias supports harsher punishments against corporations says:

    I worked in HR/Payroll and handle garnishments every day. Take my professional advice from experience:

    Do not let your debts become garnishments unless you have no other choice! The fees tacked on are sometimes enourmous and you are much better contacting the Agency you owe money to and working out a payment plan. A garnishment requires that 25% of your earnings go to satisfy the debt. Even if you have to pay the maximum 25% out of your earnings each paycheck directly to the agency in a separate agreement, it’s better you make that deal directly with the Agency rather than being forced to make the same payments after legal fees, interest, handling fees, and garnishment administation fees are tacked on.

    And, yes, in some circumstances banks can be forced to freeze your accounts, but I am honestly surprised it came to that as part of a garnishment proceedings. Usually te approach is to file a garnishment request with the courts and force your employer to garnish your wages for them.

    • mac-phisto says:

      good advice. garnishment on wages can also have the nasty side effect of job loss. technically, it’s not legal to fire someone for a court-ordered garnishment, but it happens. the added paperwork alone is enough to make your boss want to can your ass, but worse – your employer becomes civilly (& possibly criminally) liable if garnishments are not executed properly. that pretty much guarantees that they’ll be looking for any legal excuse to make you disappear.

  5. treimel says:

    Okay … get out the bingo cards, I’ll be the one. Really? you’re complaining because you got poor service and communication from your bank after your accounts were frozen to *satisfy a judgment.* ?!? I’ll go ahead and break the news to you–getting your accounts attached makes you a terrible, terrible customer from the bank’s point of view; it’s work for them and it makes them no money. Moreover, you are now definitively deadbeats in their eyes. Sorry, but that’s the way it works.
    Yes, in a perfect world the accounts would have been un-frozen in a more timely fashion, but frankly less than three weeks is hardly an eternity in this situation. Unfortunate, yes, but horrifyingly slow? Not really; I’ve seen much worse many times.

    • Loias supports harsher punishments against corporations says:

      Many people keep all their funds in one bank, so having your funds all suddenly frozen is a huge deal. Plus think of all the bills you have deducted through your bank that suddenly don’t go through.

      Imagine having to try to find income from friends and family while it’s frozen. And if you are poor, chances are most of your friends aren’t too wealthy themselves and unable to help you. No bank will let you borrow in the situation you are in. Now suddenly you become further delinquent on debts because of this other debt and everything compounds. Yes it’s a big deal.

      • treimel says:

        I never said or implied it wasn’t a big deal–what I was saying is that it shouldn’t come as a surprise. I’m not defending the bank’s slow action; personally, I think it’s deplorable. Nevertheless, the idea that you’re going to be treated the same as a customer with a few million in deposits is just fantasy.

  6. FinanceGeek says:

    Wait a sec, so let me get this straight. A judgment was given for $2800 three YEARS ago, and not having received their money, they finally come calling. You’re a deadbeat and you get what you deserve. $4500 including lawyers fees? It would have been $4200 from initial judgement at 15% compound interest just from the $2800 alone. What you should have done, three years ago, is cut a check for $2800 and been done with it.

    • treimel says:

      That’s a bit harsh–once the judgment was satisfied in full, Wachovia was obliged to un-freeze the account. There’s no reason to conflate the un-paid judgment with Wachovia’s slow action. Moreover, tere’s certainly no need for name-calling. People make mistakes; they can also rectify them, as was the case here.

      • FinanceGeek says:

        Deadbeat (noun): One who does not pay one’s debts.

        It’s not name calling, it’s the truth. You said they were a deadbeat in your post in the banks eyes anyhow. If people don’t pay their debts, it only hurts those that manage their debt wisely or have no debt at all.

        • treimel says:

          Thanks for proving my point–a dead beat is one who DOESNT pay–they paid. Reading comprehension, FTW.

          • FinanceGeek says:

            … They were a dead beat and only paid when their accounts were seized. Still not sure how I’m in the wrong.

            • treimel says:

              Well, you’re confusing the veracity of your assertion as a defense for its viciousness; that’s like defending calling an obese person a fat pig, and then saying, “but it’s true!”
              No one is denying that these folks failed to live up to their obligations until very late in the game (still better than a lot of people thopugh, there are millions and millions of of un-paid judments in this country.) The point is, piling on with nasty language at this point is simply not helpful.

              • FinanceGeek says:

                “Moreover, you are now definitively deadbeats in their eyes.”

                Did you not write the above statement before I made my post?

                • treimel says:

                  Seriously, read-then post. I said “the bank’s” eyes, not MY eyes. Hence, I am not calling them *anything.*

        • Colonel Jack O'neill says:

          How can they be a deadbeat, they had no money back then, so how the hell can they pay.

          • FinanceGeek says:

            You’re still a dead beat if you can pay your loans but choose not to. Whether or not you have the money to pay back the loans that you entered into is irrelevant in terms of whether or not you’re a dead beat.

            • Colonel Jack O'neill says:

              There’s a big difference between choosing not to pay, and having no money to pay.

              • craptastico says:

                there is a difference, but either way they’re a deadbeat. read the above definition of “one who does not pay their debts” now that being said, it’s pretty idiotic to just say “they should have paid it” like financegeek did. i would think being a “financegeek” you’d realize you can’t pay off a debt if you don’t have any money and the OP made it pretty clear they didn’t have any money.

                • FinanceGeek says:

                  They had three years to pay it off. If you can’t pay off $2800 over three years then all the sudden are able to raise $4500 to pay off that and lawyers fees… yeah you’re just being a dead beat.

          • friday3 says:

            It seems they COULD pay it back when Capital One got serious. They played nice for many years. Suddenly once the accounts were frozen they could find the money from mom. Wachovia is REQUIRED to get all the paperwork and have it properly executed through the court system. If Wachovia accidentally freed up the money and it was not authorized by the court order THEY would be responsible. Sorry, but the court system and Wachovia do not move at your pace. Oh wait, if that werre the case, they have at least two years until they will free up the money.

    • blogger X says:

      Congrats on probably having the first disemboweled comment on the new Consumerist!

      • FinanceGeek says:

        I’m not sure what you mean. What did I say that was incorrect? They were deadbeats on their debt for three years (after judgment…) and they’re upset about their account being locked for a few weeks? …

        • blogger X says:

          I understand what you are saying. It’s the way how you said it that gets comments like your’s disemboweled. Like how TCama said, there are many ways to handle unpaid debt before it reaches critical decisions like this. Most people don’t, and some cases, won’t reach out for help.

      • floraposte says:

        Disemboweled? Boy, the new Consumerist is scary harsh!

    • GearheadGeek says:

      Well, what they should have done is arranged a payment schedule. They didn’t HAVE the money 2 years ago, but should have taken action to prevent this sort of unpleasant outcome. Unfortunately MANY people avoid resolving the problem just as they avoid the phone calls. It’s definitely an uncomfortable situation, and dealing with collections types is probably awful, but it’s WAY better to be pro-active. Either try to work out a deal you can live with, or go off-grid and keep what money you do have in cash (with all the risk that entails.)

  7. Bohemian says:

    TCF locked up our account there many years ago. I changed employers and that was enough for someone to determine my account had fraud activity going on. Meanwhile this left me with ten bucks to my name while in a new city for work. It took me a week and eventually camping out in their main branch until one of the VPs agreed to talk to me. As soon as the account was unlocked and the funds drawn down I closed the account.

    Bank policies need to trump how big or how many locations a bank has when determining who to do business with.

    • GearheadGeek says:

      While it illustrates the pain a frozen account can cause, your story isn’t the same at all. YOU were an innocent victim of your bank’s stupidity, the OP created the situation by ignoring a judgment against them.

  8. madanthony says:

    Except Kate and her husband did pay up in late November, but until yesterday, the checking account remained frozen.

    I’m incredibly confused by the timeline, since I thought it was late November right now.

    • AK47 - Now with longer screen name! says:

      Me, too, but I’m guessing that “November” is supposed to be “October”

  9. Cant_stop_the_rock says:

    It’s hard to feel sorry for someone who ignored a $2800 judgment and suffered consequences, but Wachovia really dropped the ball here. People rely on their banks, I don’t blame the OP for moving to a different bank.

  10. twophrasebark says:

    “We understood it may take a few days; we know how legalities and bureaucracies work.”

    I am sorry for your troubles, but it seems like you had some unrealistic expectations after the account was frozen. It took three years for Capital One to issue a Writ of Garnishment for the judgment. And the judgment process itself must have taken some lengthy period of time. How is a frozen account going to resolved in a few days?

  11. FatLynn says:

    Even if you never plan to be in a garnishment situation, it is a very good idea to have at least two bank accounts. If one is frozen for any reason (fraud, computer issues, etc.), you don’t want to be at a total loss. This is akin to going on vacation to a foreign country and only taking one credit card.

    • Tim says:

      The creditor has a right to freeze all accounts, and there’s a good chance they will. And I’d bet it’s illegal to hide an account from them.

      • FatLynn says:

        This is a good point, and I wouldn’t suggest hiding accounts. However, in this case, if they had two frozen bank accounts, maybe one would have been un-frozen quickly.

        Also, I don’t know how it would work if she had accounts that were in her name only. Can they freeze those as well?

      • blogger X says:

        I’ve always wondered how creditors find accounts…

        • bhr says:

          you are required to come to court with records of all bank accounts in your name. If you don’t do this they will seek to 1) find you in contempt , 2)send a letter to all local and most national banks asking if they have an account in your name and 3)charge you for the time/effort

  12. Tim says:

    I’m going to join the “deadbeat” crowd on this one. First off, yeah, it sucks that it took Wachovia so long to unfreeze the accounts. You didn’t have your money for nearly a month.

    But guess what. Capitol One didn’t have THEIR money for THREE YEARS! The judgment was won, you knew it was their money (as if you didn’t know before …).

    Please, people, if you have outstanding debt, take care of it as soon as possible. There are so many ways to take care of such debt, and so many of them are much cheaper and much less painful than what these people did.

  13. AustinTXProgrammer says:

    @Loias: Not all states will allow them to go after wages, so it doesn’t surprise me they had to go for the bank account.

  14. ckaught78 says:

    I would guess that Wachovia is very happy these people are no longer customers.

  15. rexfromars says:

    Wow – what state do you live in where you can get garnished over a credit card?

    • treimel says:

      Umm, I have some bad news for you–a judgment creditor (such as a cc company that, uh, wins a judgment) can go after your bank account in EVERY state.

  16. ShruggingGalt says:

    @rexfromars: I believe that it’s 48/50 you can have your wages garnished for civil judgments*. TX and PA are the two where it’s forbidden.

    * garnished up to a statuatory maximum, with child support and tax levies getting first dibs.

  17. bhr says:

    I have been through this myself, and its a pain, but its not Wachovia’s fault in this case.

    When a garnishment of assests takes place the lien holder gets the court to order any/all accounts frozen up to the amount owed. Since they don’t have any idea how much is in each account until then they may essential freeze amount owedxnumber of accounts. Only balance above that amount is left available.

    When you settle it (or move the required balance into one account for them to take) the creditor then has to notify the court, who then issues a document to your bank releases those funds. This can (and usually will) take up to 30 days.

    In addition, at the same time the creditor can also obtain a writ of garnishment of wages (not 100% on the terminology in each state) and start taking money from your check as well. Usually this takes additional time to remedy as well (the account has to settle, they then have to notify your employer).

    Any time wasted in getting the money to the creditor after the freeze (actually after the lien is filed) accrues interest. That often means that even if they take 100% of the judgement from your account you may still be liable for a balance (hello paycheck garnishment.).

    If you have direct deposit they can claim the whole check if it goes in to a frozen account, regardless of the state per check limit.

    They can also sieze your car (which you would have to justify keeping) to sell it to recoup the debt, leaving you only whats left after auction.

    You can go to court to claim certain assets as exempt (percentage of pay, mortgage, your car) depending on state laws, but that takes time as well that you may not have.

    Lying to the court about assets can lead to penalties and jail time.

    If you ever get to the point of a lein try to make a payment arrangement. The creditor usually is unwilling, as they are now virtually guaranteed thier money, but its still a better option.

  18. bhr says:

    ++your bank (in my case my CU) will probably charge you a fee to handle the freeze, usually $50-$100

  19. falk says:

    Remember, the banks are not your friends. Their primary way of making money is no longer lending and borrowing, but by charging fees and finding other ways to rip you off. One of their favorites is to “hold” your deposits for a couple of weeks before crediting them. It sucks for you, not having access to your money for a while, but this way they get to collect a couple extra weeks of interest on your money before they hand it over to you.

    It looks to me like some manager at Wachovia realized they could make a little extra profit by taking advantage of the confusion and seizing Kate’s money for a few extra weeks.

    Whenever possible, you should have your money in a credit union instead of a bank. And it can’t hurt to keep some emergency cash hidden in the house somewhere.

  20. SkuldChan says:

    I dunno – she and he may have screwed up, but the banks poor service after they made good with the debt are inexcusable.

    • friday3 says:

      The bank is required by law to have everything released from the writ. he writ is not a please do this, it is a MUST do this. If they do it improperly, they are breaking the law. I think she should be happy to get her money whenever they get around to unfreezing it. She decided to pay her bills that way, why shouldn’t Wachovia do it when it gets around to it.

  21. steveliv says:

    It seems that if the original judgement had been taken care of, none of this would have happened. I’m sure Capital One would have been willing to accept some sort of payment plan. You can complain about what happened at the bank, but they were only doing what was ordered by the court, its not as if they could unfreeze the account simply on your word alone.

    • LadyTL says:

      Unfortunately going through Capital One’s payment plans is always going to lead to you being overcharged for the debt since they will just keep billing you even after the debt is gone and then try and feed you inaccurate figures to say that it wasn’t. I got a debt written off from them because I called them on the math.

  22. Saphyre1960 says:

    Wow, a hard working couple is getting crucified here due to some youthful mistakes. I am sure no one on this board has ever made a mistake before.
    My stupid youth was spent with a husband who assured me by signing on the dotted line we wouldn’t have anymore money troubles. The very same troubles we wouldn’t have had if he didn’t max out our credit cards on “clients”. You may hear it said that 7 years after a bankruptcy you can build again. WRONG! You can try to build again, but it won’t happen. I divorced said marital liability during those 7 years, sold my wedding rings to take care of my son and had 2 jobs at one point. It was difficult for me to rent an apartment because of a bad credit score. I had to get friends to vouch for me. When I was finally able to buy a new car GMAC gave me a rectal exam going back 14 years to the time of the bankruptcy. The car was being bought jointly by my second husband and myself. We nearly didn’t get the Saturn because of my 14 year old bankruptcy even though we both had good jobs. He is in IT and I was in MT at the local hospital.
    So anything you do in your youth or in your life can screw you hard with banks.
    It goes to show how screwed up the country is when the common man pays for years for a debt that is a scintilla of what a wall street banker (AIG, BOA, Goldman Sachs) simply steals and then get reimbursed from the government.
    Yes, they made a mistake, we all make mistakes (or marry them) but to be branded deadbeats is just over the top. As for just paying it and being done (which is what I would have done too) well, hindsight is always 20/20.

    • steveliv says:

      They lost my sympathy when they said that they had ignored the judgment for three years. People can make mistakes, but they still have to pay for them.

    • twophrasebark says:

      I can’t speak for anyone else, but I have sympathy for their mistakes. The issue is that they don’t have any sympathy for the bank. They have an unrealistic expectation regarding the bank’s response that does not meet their own behavior, which was to repeatedly ignore the situation for years.

      One also has to consider that Wachovia didn’t freeze the account; the court did in response to a judgment from Capital One. There are a lot of parties involved here. The amount of time to unfreeze the account seems quite reasonable to me.

  23. eirrom says:

    My question is how did Capital One find out where their checking account was? Did they tell them? It is not/should not be common knowledge so how did that happen?

    I work in collections (12 years now) and would love the ability to take money out of a checking or saving account if I could (with a garnishment order of course), but I have no idea where my deliquent customers bank. That seems so weird to me.

  24. econobiker says:

    As falk said at November 24, 2009 1:33 PM: banks are no longer your friends, they make more money on negative action (late, overlimit etc) fees then positive action (build a new business, buy a car) loan interest.

  25. ahleeeshah says:

    I am not in love with Capital One right now. I used to have a credit card and bank account with them, but both have been closed for at least a year. Yesterday, though, I got a privacy notice in the mail from them, at an address I just moved to a few months ago. I do not do any business with any of the companies listed in the pamphlet, but when I tried to call to ask why I was receiving this, the number printed on the thing would only come back with a recording saying something like “The information for this line has changed. To subscribe to updates press 1. There will be a monthly charge of $9.99 and message and data rates may apply.”

    I am going to try calling the number from their website instead.

  26. JiminyChristmas says:

    It’s easy to pile on the OP (because we’re all so much smarter than that) but people should acknowledge this is a two-way street. Yes, the OP reneged on their debt but what about Capital One?

    Capital One makes money by charging interest on unsecured loans. They often charge very high interest on very large loans with no collateral. Sounds like a pretty risky line of business to me and the risk of default on the part of the borrower is one CapOne chose to accept.

  27. Nemesis_Enforcer says:

    I asked a friend that works in CS for BofA and she told me that she sees this several times a year. She also told me something I didn’t realize a bank could do. But after thinking about it I figured why wouldn’t they?

    It seems she had a customer who defaulted on their BofA CC to the tune of about $4,500. Well they also had a checking account with BofA with money in it. So BofA took all the money this guy had in his checking to pay off the CC. She told me that they could go after any account you have to get the money. So if you have a CC with your banks don’t default on it!

  28. H3ion says:

    The OP was wrong on so many levels. When a garnishment comes in for one of our employees, it is a royal pain to take care of through the automated payroll process. These debtors, including the OP, have got to know that they owe money or they have their heads buried in an uncomfortable place.

    That said, the delay in unfreezing the accounts was unconscionable and if these people are still with Wachovia, something is definitely wrong. OTOH, I’m sure Wachovia would be happy to wave goodbye as well.

  29. friday3 says:

    As a side note to this case. If you are married to somebody with potential creidt issues, keep a separate bank account in your own name. It was HIS debt, not hers. Her bank account could still be at Wachovia, but they can not touch her asset or garnish her wages.

  30. Caveat says:

    Congrats to Capital One and the court system! Wachovia only followed the court order.
    Kate is as irresponsible as her hubby. Before wedded bliss, did she bother to ask how much debt the bum had outstanding? I bet they spent thousands on the “perfect” diamond solitaire engagement ring and plenty more thousands on the wedding, but I imagine paying debts was last on the list. If she had the option of borrowing from mommy, why did she not do it BEFORE the court order???

  31. KC1054 says:

    Didn’t the letter say that they only JUST started living above the poverty line? I know it’s easy to peer down one’s nose at this point with skeptical eyes, but as someone who pretty much lives paycheck to paycheck, $2800 bucks IS a lot of money, regardless of how much time you have to pay. When you have bills to pay and need to put food in your stomach, being able to put $2800 dollars away, no matter how insignificant that might seem to some, is a very big deal.

    “Let he who hath not sinned” and all that…