By: Robert J. Nahoum
Finding out your bank account is “restrained” (frozen) or that your paycheck is being garnished can be a terrifying experience. In most cases, these aggressive collection tactics happen because a “default judgment” was entered against you—often without you even knowing you were being sued.
At The Law Offices of Robert J. Nahoum, P.C., we help New Yorkers fight back against debt buyers and collectors. Below are the most frequently asked questions regarding bank restraints and wage garnishments in New York courts as of 2025.
- Why is my bank account frozen?
In New York, a creditor cannot freeze your bank account unless they have a court judgment against you. If your account is frozen, it means a “Restraining Notice” was served on your bank. This can only happen after a debt collector wins a lawsuit—often by “default” and sometimes because the consumer was never properly served with the legal papers.
- What is the Exempt Income Protection Act (EIPA)?
The EIPA is a New York law that protects a certain amount of money in your bank account from being frozen, even if there is a judgment against you.
- Direct Deposit Exemption: If your account received a direct deposit of “statutorily exempt” funds (like Social Security, Disability, Veterans benefits, or Pensions) within the last 45 days, the first $3,425 in your account is protected and cannot be frozen.
- Wage Cushion: Even if you don’t have exempt benefits, New York law protects an amount equal to 240 times the minimum wage. As of 2025, this means approximately $3,960 (in NYC, Long Island, and Westchester) or $3,720 (rest of state) must remain available to you.
- How much of my paycheck can a debt collector take?
In New York, a wage garnishment is officially called an “Income Execution.” Generally, a collector can only take the lesser of:
- 10% of your gross income; or
- 25% of your disposable (after-tax) income.
Crucially, your weekly disposable income cannot be reduced below a certain floor (30 times the minimum wage). In 2025, this floor is $495.00 per week for residents of NYC, Long Island, and Westchester, and $465.00 for the rest of New York State. If you earn less than this after taxes, your wages cannot be garnished at all.
- I never knew I was sued. How do I stop this?
If you first learned about the lawsuit because of a frozen account or a garnishment notice, you likely have a “default judgment” against you. To stop the collection and unfreeze your money, you must file an Order to Show Cause to “vacate” (cancel) the judgment.
To succeed, you generally need to show:
- Lack of Personal Jurisdiction: You were never served with the summons and complaint at the initiation of the case.
- A Reasonable Excuse: Usually, that you were never properly served with the summons and complaint or the papers for some other reason were not delivered to you.
- A Meritorious Defense: A reason why you don’t owe the money or why the collector can’t win (e.g., the debt is past the 3-year statute of limitations for consumer credit contracts in New York).
- Can I get my money back if it’s already been taken?
Yes, but you must act quickly. If you file an Order to Show Cause and the judge signs it with a “stay,” the collector must stop all collection activities immediately. If we successfully vacate the judgment, we can often force the return of any funds that were illegally or improperly seized.
- Do I need a lawyer to handle this?
While you can go to court yourself, debt collectors and debt buyers are represented by experienced attorneys. Having a dedicated New York debt defense lawyer like Robert J. Nahoum ensures that your rights are protected, your exemptions are correctly calculated, and your Order to Show Cause is drafted to maximize your chances of getting the judgment thrown out.
Take Action Now
If your bank account is frozen or your wages are being garnished, don’t wait. The Law Offices of Robert J. Nahoum, P.C. defends consumers across New York in debt collection cases.
Contact us today at (845) 232-0202 or visit www.nahoumlaw.com for a free consultation.
Disclaimer: This post provides general information and does not constitute legal advice. Laws regarding minimum wage and exemptions are subject to change; always consult with an attorney regarding your specific case.