Frozen Account Law and Legal Definition

An account to which no withdrawal or purchase can be charged is a frozen account. A frozen account shows an account holder’s liability to pay an amount. A creditor can freeze a debtor’s account up to twice the debt. Usually, banks provide notice of freezing to the account holder.

An account is frozen when:

There is a lien on an account; A court order freezes an account; or Account holder fails to pay immediately the charged prices.

When a person dies, the deceased’s account is frozen until a new lawful owner appears. When there is a dispute regarding the amount in an account, usually the account is frozen until resolution of the legal action.