Many consumers have had to rush to seek bankruptcy protection to unfreeze accounts that were restrained after “sewer service”
Written by Craig D. Robins, and Esq.
Over the years, many of my Long Island bankruptcy clients have rushed to my office in shock that their bank accounts had been frozen even though they never received any lawsuit papers.
Freezing or “restraining” a bank account is a remedy that a creditor can take against you, but only after they serve you with legal papers (a summons and complaint) and then get a judgment against you.
As it turns out, some New York process servers may have taken an illegal shortcut by failing to serve legal papers properly. As a result, many consumers have been complaining to governmental agencies.
New York State Attorney General Andrew Cuomo recently launched an intensive investigation into possible fraud in the process-serving industry because thousands of consumers may have had their bank accounts frozen or their wages garnished without any knowledge of court proceedings against them.
In these times of economic hardship, this issue has become increasingly important. According to a recent Newsday article, tens of thousands of consumers may have been affected, including many on Long Island.
Improper service of legal papers is often referred to as “sewer service,” which means that the process server neglected to serve the legal papers properly and may have just as well thrown them down a sewer.
Bad Process Service Frequently Results in Bankruptcy Filing
Victims of “sewer service” are usually in serious debt and come to me with their bank accounts frozen.
Although a consumer who was improperly served can often bring a legal proceeding to set aside a judgment that the creditor improperly obtained, doing so can be time consuming and costly. There is often an issue as to whether doing so is even worth it, as most consumers in these circumstances concede that they owe the underlying debt.
Usually the quick filing of a Chapter 7 bankruptcy, if the consumer is eligible, is enough to unfreeze the bank account and eliminate the debt, as well as all other debts.