Learn something new every day
More Info... by email
Frozen assets are simply objects owned by people or businesses that cannot be sold or traded because they have been locked by someone else that is owed money. When a debt is not paid, and there is no other way to have a chance of obtaining their money back, all of the debtor’s assets will be frozen. This can include bank accounts, vehicles, property, and anything else that is exclusively owned that the state does not consider exempt from the debt collector. Even though the person or company cannot officially lose their objects with frozen assets, they will not be able to do anything with the property that is locked. Because of this, many companies can go bankrupt, and many people can lose their homes and material objects because they cannot sell or trade them in order to pay other debts.
For instance, if a person gets a loan for a new car and they were not required to have any items of collateral; a few things can happen if they do not pay the debt off. If this person gets into a wreck and totals the car, and did not have enough insurance coverage on it, the lender can freeze their bank account. This is done until a court hearing can be held in the hopes that the courts will award the money in the account to the person that is owed the money. Many different areas have different rules and regulations regarding frozen assets, and can range from bank accounts to houses.
When an individual person has this done to their bank account they will no longer be able to withdraw any money until the issue has been resolved. The worst part of these types of frozen assets is that if direct deposits are set to go into the account, the money will be deposited and locked as well. If an account is locked, it will stay that way until a court hearing is held and a winner is awarded. This can also work with vehicles, homes, and anything else that is worth value and was not used as collateral.
A company that has frozen assets may be required to file bankruptcy because they will not have access to their operating funds. This means that they will not be able to liquidate any of their property or vehicles in order to fulfill any financial obligations. This type of lock will also reflect upon their future by telling other creditors and lenders that they have had a past incident of not paying their bills, and not working out a reasonable payment plan to take care of the delinquent account.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!