Administrative Freeze

A temporary refusal by a bank to pay a debt to the debtor. The administrative freeze prevents the debtor from withdrawing funds from its account before the bank can obtain relief from the automatic stay to permit the bank to exercise setoff. An administrative freeze does not violate the automatic stay so long as the bank promptly seeks relief from the automatic stay and freezes only the amount necessary to satisfy its potential setoff right.

Bankruptcy Code ยงยง 362(a)(7); 553. See also Automatic Stay, Setoff.

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