Frozen Asset Law and Legal Definition

A frozen asset is an asset that is difficult to convert into cash. It can also be an asset that cannot be used because of some legal restrictions. The owner may not sell or use the frozen asset because of a debt which is not paid. Generally, a frozen asset is the pledged collateral on the debt. The asset remains frozen until the debt is settled or the creditor is satisfied otherwise. Mostly, owner of the asset is notified in writing that his/her asset is frozen. Frozen asset is also known as illiquid asset.