Can an MCA funder freeze my bank account?

Yes. If the funder obtains a judgment, typically through a confession of judgment, they can serve a restraining notice on your bank that freezes the account. This can happen without warning.

How do I unfreeze my bank account?

You need to challenge the underlying judgment or restraining notice in court. This typically involves moving to vacate the confession of judgment or filing a motion to release the restraint. An attorney can often obtain emergency relief.

How long does it take to release a frozen account?

Emergency motions can sometimes result in relief within days, though the timeline depends on the court's calendar and the specific grounds for the challenge. The underlying judgment challenge may take longer to fully resolve.

Your Bank Account Was Frozen by an MCA Funder: What to Do

A frozen bank account can shut down your business overnight. If an MCA funder has frozen your account, there are legal tools available to get it released, but you need to act fast.

How MCA Account Freezes Happen

The typical sequence is: the funder files a confession of judgment, obtains a judgment from the court clerk without a hearing, and immediately serves a restraining notice on the business’s bank. The bank is legally required to freeze the account upon receiving the notice. The business owner usually discovers the freeze when payroll bounces, vendor payments fail, or they cannot access their own funds.

Immediate Steps to Take

First, identify whether the freeze is based on a confession of judgment or a court-issued restraining order. This determines which legal mechanism to use for release. Second, determine if exempt funds are in the account. Certain funds, including Social Security and other federal benefits, are exempt from restraint. Third, contact an attorney immediately. Account freeze cases are time-sensitive because every day the account is frozen, the business suffers operational damage.

Legal Grounds for Releasing the Freeze

The most effective path is usually challenging the underlying judgment. If the confession of judgment was improperly filed, obtained through fraud, or violates the 2019 reform requirements, vacating the judgment automatically releases the restraint. In some cases, a motion to release the restraint can proceed faster than the full vacatur motion, providing interim relief while the merits are litigated.

Protecting Your Business Going Forward

Once the immediate crisis is resolved, it is important to evaluate the broader MCA situation. If the funder froze one account, they may attempt to restrain others. A comprehensive defense strategy addresses not just the current freeze but the underlying dispute.

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