Asset Freezes in Florida

A court-ordered asset freeze prevents a person from moving, spending, or transferring assets while litigation is pending. Prejudgment asset freezes are rare in Florida civil cases because federal and state law generally prohibit freezing a defendant’s property before a judgment is entered in an ordinary claim for money damages.

That rarity leaves a Florida defendant room to act. Someone sued for money damages can usually still buy a homestead, fund exempt accounts, or move assets into protected structures while the case runs. Fraudulent transfer law limits what those moves accomplish, but the planning window stays open until judgment. An asset freeze shuts it early.

Why Prejudgment Asset Freezes Are Rare in Florida

A federal judge has no authority to stop a defendant from spending or moving assets during a suit for money damages. The Supreme Court so held in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999), reasoning that a court of equity never offered that remedy. A creditor who has not yet won a judgment holds no interest, legal or equitable, in the debtor’s property. Expanding equity that far was a job for Congress.

Florida courts reached the same result on their own. A plaintiff suing for money damages cannot get an order restraining the defendant’s unrestricted assets before judgment. The Third District called that rule settled by “a long and unbroken line of Florida cases” in Konover Realty Associates, Ltd. v. Mladen, 511 So. 2d 705 (Fla. 3d DCA 1987). The test asks whether a judgment can be obtained, not whether it will be collectible once entered.

When Can a Court Freeze Assets Before Judgment?

A Florida court can freeze assets before judgment when the plaintiff seeks equitable relief, when a creditor sues over a fraudulent transfer, or when a government agency sues under a statute that authorizes a freeze. A prejudgment writ of attachment or garnishment is available only on narrow statutory grounds, and a court can freeze assets outright to sanction a defendant who has abused the litigation.

Equitable claims. Rescission, restitution, and constructive trust claims invoke the court’s equitable powers, and an injunction preserving the disputed property is a recognized remedy. The freeze still has to track the equitable claim. A boilerplate request for “such other relief as is just and proper,” bolted onto a damages complaint, does not create one, as the Eleventh Circuit explained in Rosen v. Cascade International, Inc., 21 F.3d 1520 (11th Cir. 1994).

Fraudulent transfer claims. Florida’s Uniform Fraudulent Transfer Act gives a creditor three prejudgment tools: an injunction that stops further disposition, an attachment reaching the transferee’s property, and a receiver. The statute defines a claim to include a right to payment whether or not it has been reduced to judgment, so the creditor need not have won the underlying case yet. Only levy of execution waits for a judgment.

Section 726.108 grants the injunction only subject to equitable principles and the rules of civil procedure. The Third District relied on that language to reverse an ex parte order freezing nearly $63 million of a defendant’s Florida assets in Berto v. Meridian Trust Co., 221 So. 3d 757 (Fla. 3d DCA 2017). Avoidance runs only as far as the creditor’s claim requires, and the recovery cannot exceed the value of the transferred asset or the amount of the claim, whichever is less.

Government enforcement actions. The SEC and the CFPB can obtain orders freezing a defendant’s assets, often without prior notice, because their statutes authorize the disgorgement or restitution that a freeze preserves. Florida’s deceptive trade practices statute names the remedy outright, letting the state ask under Florida Statute § 501.207 for sequestration or freezing of a defendant’s assets. Federal agencies post no injunction bond, which keeps the cost of asking low.

The FTC’s authority narrowed in 2021. The Supreme Court held in AMG Capital Management, LLC v. FTC, 593 U.S. 67 (2021), that Section 13(b) of the FTC Act does not authorize equitable monetary relief. Later that year the Eleventh Circuit followed in FTC v. On Point Capital Partners LLC, 17 F.4th 1066 (11th Cir. 2021), holding that an asset freeze premised solely on that section is inappropriate. The FTC can still freeze assets, but only under Section 19, which reaches a defendant who violated a trade rule or faces a cease-and-desist order.

Prejudgment writs. Chapter 76 lets a private creditor attach a debtor’s property before judgment, but only on a debt that is actually due. A malpractice or personal injury plaintiff has no debt due and cannot use it. The creditor files a verified complaint or a separate affidavit showing specific facts that establish one of the twelve grounds Florida Statute § 76.04 lists. Fraud is only part of the list. Removing property from the state, secreting it, absconding, and residing out of state each qualify on their own.

Florida Statute § 76.12 requires a surety bond worth at least double the debt demanded before the writ issues. The bond covers whatever costs and damages the defendant sustains if the attachment was improper. That obligation, more than the grounds, is why attachment stays rare. Chapter 77 works the same way on the garnishment side, and § 77.02 bars a prejudgment writ in an action sounding in tort.

Discovery sanctions. Courts can also freeze assets as a sanction for litigation misconduct. When a defendant repeatedly violates discovery orders or refuses to comply with court directives, a judge can enter a default and then restrain the defendant from transferring any assets—even before damages have been determined. The restraint is not directed at specific property but at the person, making it broader than a typical freeze.

What Does a Motion to Freeze Assets Look Like?

A motion to freeze assets is styled as a motion for temporary injunction. Florida abolished the temporary restraining order as a separate device, so what a federal lawyer would call a TRO is, in state court, a temporary injunction entered without notice. The plaintiff supports the motion with a verified pleading or an affidavit setting out specific facts, and the court usually holds a hearing before deciding.

Rule 1.610 governs how a temporary injunction is entered, while the standard for granting one comes from case law. The Florida Supreme Court in Wilson v. Sandstrom, 317 So. 2d 732 (Fla. 1975), required irreparable harm, a clear legal right to the relief, and no adequate remedy at law, and treated the public interest as a fourth consideration. The districts do not state the list identically, and the Third District asks instead for a substantial likelihood of success on the merits and weighs the harm to each side.

A plaintiff who argues that the defendant may not have enough left to pay a future judgment loses on the adequate-remedy element. The possibility that a judgment will not be collectible says nothing about whether the remedy at law is adequate, as the Fourth District put it in Hiles v. Auto Bahn Federation, Inc., 498 So. 2d 997 (Fla. 4th DCA 1986). What survives that test is a claim to specific, identifiable funds the plaintiff says are its own, which a court can order deposited or held until ownership is decided.

A plaintiff who wins a temporary injunction must post a bond in an amount the court deems proper. Florida sets no percentage and no formula; a contested amount is fixed at an evidentiary hearing.

A defendant who was wrongfully enjoined has to prove actual damages, assessed on dissolution under Florida Statute § 60.07. For a plaintiff who acted in good faith, liability stops at the bond figure (Parker Tampa Two, Inc. v. Somerset Development Corp., 544 So. 2d 1018 (Fla. 1989)). A bond set too low leaves the defendant carrying the rest of the loss.

What Happens If You Violate an Asset Freeze?

Violating an asset freeze is contempt of court. A person who transfers, hides, or dissipates assets in defiance of a freeze order can face civil contempt sanctions—including fines and incarceration until the person complies. Courts can also extend the freeze to reach assets held by third parties who are assisting the debtor.

A freeze order reaches beyond the party it names. Rule 1.610(c) binds the parties, their officers and agents, and anyone in active concert with them who receives actual notice, which is how a company that holds the debtor’s property ends up before the judge. The Fourth District affirmed contempt against a company that never appeared in the case and was never served. It had actual notice of the injunction and had acted in concert with the enjoined employees (Channell v. Applied Research, Inc., 472 So. 2d 1260 (Fla. 4th DCA 1985)).

A court cannot impose contempt unless the act clearly contravenes the order and the court finds an intent to violate it. The Second District drew that line in Osmo Tec SACV Co. v. Crane Environmental, Inc., 884 So. 2d 324 (Fla. 2d DCA 2004). It reversed contempt against buyers who purchased an enjoined business’s assets with notice, because the injunction shut the business down and never said the assets could not be sold.

Post-Judgment Freezes

A judgment creditor in Florida has collection tools that work like a freeze even though no order uses the word. Florida’s judgment collection statutes supply three: garnishment, a recorded judgment lien, and proceedings supplementary. A creditor can run all three at the same time.

A writ of garnishment served on a bank freezes the debtor’s accounts immediately upon receipt. The bank must hold the funds and respond to the court within the statutory deadline. The debtor receives notice only after the freeze is already in place and must file a claim of exemption to recover protected funds.

A judgment creditor can serve garnishment writs on several banks the same day. Discovery in aid of execution then turns up the accounts the creditor missed. A judgment lien recorded against the debtor’s real property blocks a clean sale. Proceedings supplementary under Florida Statute § 56.29 reach further, pulling a spouse, a relative, or an LLC holding the debtor’s property into the judgment case itself rather than a separate suit.

Family Law Asset Freezes

A Florida divorce court can freeze a spouse’s assets only on specific grounds. Florida Statute § 61.11 lets the court award a ne exeat writ or an injunction against the spouse or the property when the spouse is about to leave the state, remove property from the state, or fraudulently convey or conceal it. The statute ties the order to securing alimony or support.

A circuit can also impose financial restrictions by standing administrative order rather than case by case. That authority belongs to the circuit’s chief judge under the Florida Rules of General Practice and Judicial Administration, and it is separate from § 61.11. Those rules let a party challenge an administrative order on the ground that it conflicts with the rules of procedure.

Rule 12.605 of the Family Law Rules governs temporary injunctions in a dissolution case, and its committee note directs that the case law under Rule 1.610 applies to it. A spouse facing a financial injunction therefore has the same arguments a civil defendant has, and the same right to a hearing on a motion to dissolve within five days.

How Asset Protection Planning Relates to Freeze Risk

Most Florida civil lawsuits for money damages do not result in prejudgment asset freezes. A person facing a contract dispute, personal injury claim, or business tort lawsuit can generally continue to manage and restructure assets during the litigation, subject to fraudulent transfer limits.

The risk of a freeze rises when a government agency is the plaintiff. It also rises when the complaint pleads an equitable claim or a fraudulent transfer. A defendant sued by the SEC or a state consumer protection unit should assume a freeze is coming with the complaint, because agencies move at filing rather than after judgment. That short window is the reason asset protection planning is easier before a claim than after, though it does not stop once a suit is filed.