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What is a lien on a bank account, and how does it work legally?
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A lien is a legal claim a creditor places on an asset — here, your bank account — to secure repayment of a debt. Two situations are common:
1. Banker's right of set-off
If you have both a deposit account and a loan with the same bank, the bank may use money in your account to recover overdue amounts on that loan. This generally needs no court order, but the bank should give you notice.
2. Court- or arbitration-ordered attachment
If a creditor has a court judgment or arbitration award against you, it can ask for your account to be frozen or attached. You then can't operate the account, and funds can be used to pay the debt.
If your account has been frozen:
- Ask the bank in writing for the legal basis of the lien or freeze.
- If it's court-ordered, you can challenge the underlying order in the right forum.
- If it's a set-off without notice, complain to the bank's grievance officer.
- If the bank doesn't respond, complain to the RBI Ombudsman.
Some salary may be protected from attachment under the Code of Civil Procedure. Speak to a lawyer about your specific situation.
SL
SingleDebt Legal Team
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