What Is a Sequestration Order in Court? Process and Property

A sequestration order in court is a judicial directive that temporarily seizes specific property and places it under court control so it cannot be sold, hidden, transferred, or wasted before a lawsuit or debt collection action is resolved. The U.S. Marshals Service describes a writ of sequestration as a prejudgment process that orders property to be held under court supervision until the court determines otherwise.¹ Courts treat it as a serious step, generally reserved for situations where credible evidence shows that identified assets are at genuine risk of disappearing.

What sets sequestration apart from other prejudgment tools is its focus on specific, identified property. The writ must precisely describe the asset being seized and where it is located, so the order locks down particular things rather than sweeping up everything a debtor owns.¹

When Courts Issue Sequestration Orders

The most detailed federal framework sits inside the Federal Debt Collection Procedures Act, which governs how the United States collects debts owed to it. Under that statute, a court may authorize sequestration of income from property in which the debtor holds a substantial nonexempt interest, with the income held as security for whatever judgment the government eventually wins. The statute reaches contract disputes, tort claims, cases where the debtor lives outside the United States, and actions to recover fines, penalties, or taxes.²

Private parties also use sequestration in commercial disputes where valuable property is at stake, particularly when one side believes the other is about to sell off or damage specific assets. Family law courts use similar orders in high-asset divorce cases, freezing marital property when a spouse appears to be transferring or hiding it. Procedures and terminology vary by state. Some states keep their own writ of sequestration statutes; others fold the concept into broader injunctive relief.

What the Applicant Must Prove

A court will not freeze someone’s property just because the other side asks. Under the federal framework, the application must include a sworn affidavit that establishes, with specificity, facts supporting both the validity of the underlying claim and the right to recover what is being demanded.³ Beyond the merits, the applicant must give the court reasonable cause to believe that at least one of several risk factors is present:

The debtor is about to leave the jurisdiction in a way that would frustrate collection.
The debtor is disposing of, concealing, or destroying property to put it out of reach.
The debtor is converting property into cash or securities in a way that harms the creditor’s ability to collect.
The debtor has hidden from service or temporarily left the jurisdiction to avoid the lawsuit.

These grounds apply when the federal government is the creditor.³ When private parties seek sequestration under state law, the specifics vary, but the core demand is the same: a legitimate underlying claim and a real risk that the targeted property will be gone by the time the case ends.

How the Order Is Issued and Served

Ex Parte Applications and Later Hearings

Because the point of sequestration is to prevent someone from moving or hiding property, these orders are frequently sought without advance notice to the owner. That is called an ex parte application. If the owner knew the freeze was coming, they would have every reason to move the assets first.

The federal statute requires that the application state the debtor will be given an opportunity for a hearing, so the property owner gets a chance to challenge the seizure after it happens.³ That post-seizure hearing is the constitutional backstop. The initial ex parte order is tolerated because of urgency, but the owner must have a prompt, meaningful chance to contest it.

The Indemnity Bond

To protect the property owner from a wrongful seizure, the party requesting the writ usually has to post an indemnity bond before the clerk will issue it. The Marshals Service’s own policy directives confirm that the writ issues upon posting of an indemnity bond by the requesting party.¹ The bond works as insurance: if the court later concludes the seizure was improper, the bond compensates the owner for losses during the freeze.

One significant exception. When the United States itself is the creditor seeking sequestration under the Federal Debt Collection Procedures Act, no bond is required.³ For private-party writs under state law, the bond amount is typically set by statute or by the court and often tracks the value of the property or a multiple of the claimed debt.

Execution of the Writ

Once the court issues the writ, the U.S. Marshal, or someone specially appointed by the court, serves it. The writ must precisely describe the property and its location, and the requesting party generally accompanies the marshal during execution to answer questions that come up. Service is normally limited to the state where the district court sits, unless a federal statute or court order extends its reach.¹

What Property the Order Can Reach

Under the federal statute, the target is income from property in which the debtor holds a substantial nonexempt interest.² In broader practice, sequestration has reached real estate, bank and investment accounts, business inventory, vehicles, and intellectual property. Once the order takes effect, the owner cannot sell, transfer, or encumber any of the seized assets without court approval.⁴

Courts have extended these concepts to digital assets, including cryptocurrency, ordering defendants to disclose private keys, identify storage devices, and refrain from transferring digital holdings without approval. The principle is the same: if the asset has value and the debtor might move it, the court can freeze it.

Exempt Property

Not everything a debtor owns is fair game. Under the Federal Debt Collection Procedures Act, an individual debtor can elect to exempt certain property. The debtor chooses between two lists: the federal bankruptcy exemptions in Section 522(d) of Title 11, or property exempt under other applicable federal, state, or local law based on where the debtor has lived for the 180 days before the application was filed. Property held as a tenancy by the entirety, joint tenancy, or community estate may also be exempt to the extent nonbankruptcy law protects it.⁵ Identifying and asserting these exemptions promptly at the post-seizure hearing is one of the most important steps a property owner can take.

Who Manages the Property While It’s Frozen

After a writ is executed, someone has to take care of the seized property. In many cases, the U.S. Marshal maintains custody under court supervision. The requesting party can also be named substitute custodian, taking direct responsibility by court order or written agreement with the Marshal. A party serving as custodian must prove storage fees are paid and that adequate insurance against loss or damage is in place.¹

For larger or more complex estates, courts appoint a receiver. Under federal law, a court may appoint one when there is reasonable cause to believe the property faces a substantial danger of being removed from the jurisdiction, lost, concealed, materially damaged, or mismanaged. A receiver appointed to manage residential or commercial property must have demonstrated expertise with that type of property.⁶

Receiver compensation is typically capped at five percent of the sums received and disbursed, unless the court directs otherwise. If the receivership ends with no funds available, the court can order the party who requested the appointment to pay the compensation and any unpaid expenses.⁶ These costs come off the top. A prolonged receivership steadily erodes the value of the estate, which matters for both sides: the longer the dispute drags on, the less remains for anyone.

What Happens If You Violate the Order

A sequestration order is a court order, and violating it carries serious consequences. An owner who sells, hides, or transfers seized assets in defiance of the order faces contempt of court, which can bring fines, sanctions, or jail time. Federal courts have inherent authority to punish contempt, and judges do not take kindly to parties who undermine the court’s control over property it has specifically ordered preserved. Even acts that seem minor, like withdrawing funds from a frozen account or allowing a third party to use sequestered equipment, can trigger contempt proceedings.

Cooperation with the receiver or custodian is not optional either. Failing to turn over records, blocking access to property, or providing misleading information about where assets are can all be treated as obstruction. If your property has been sequestered, challenge the order through proper legal channels. Do not try to work around it.

Getting a Sequestration Order Lifted or Modified

A sequestration order is temporary by design. It stays in force until the underlying case reaches a final judgment, the parties settle, or the assets are formally distributed. The property owner does not have to wait for that, though. You can petition the court to dissolve or modify the order at any time by arguing that the original grounds were insufficient, that circumstances have changed, or that the order is causing disproportionate harm.

Under the federal statute, a receivership cannot continue past the entry of judgment or the conclusion of an appeal unless the court specifically orders otherwise. The court also retains the power to remove the receiver or modify the receiver’s powers on its own initiative at any time.⁶

Posting a Substitute Bond

The most direct way to get sequestered property released is to post a substitute security bond with the court. The bond guarantees payment of any eventual judgment, giving the court the same protection the seized property was providing. Once the bond is approved, there is no longer a reason to hold the physical assets, and control returns to the owner. The amount is set by the court and generally reflects the value of the property or the amount of the underlying claim, plus anticipated interest and costs.

A substitute bond can be expensive, but for an owner whose business or livelihood depends on the seized assets, it is often the fastest route back to normal operations. Surety companies issue these bonds for an annual premium, and the cost depends on the bond amount, the applicant’s creditworthiness, and the perceived risk of the case.

Costs on Both Sides

Sequestration is not cheap for anyone. The party requesting the writ typically covers court filing fees, the cost of the indemnity bond, and an advance deposit for the U.S. Marshal’s out-of-pocket expenses in executing the seizure. If property has to be moved or stored, the requesting party pays storage fees and arranges insurance.¹

For the property owner, the costs are less visible but no less real. Losing access to capital, inventory, or real estate can stall a business. Receiver fees, capped at five percent of sums handled under the federal statute, accumulate and come out of the seized estate, reducing what is ultimately available for distribution.⁶ Legal fees for contesting the order or negotiating a substitute bond add another layer. The expense on both sides is one reason sequestration tends to accelerate settlements. Neither party benefits from a prolonged freeze.

1
U.S. Marshals Service. Policy Directives – Service of Process
2
Office of the Law Revision Counsel. 28 US Code 3105 – Sequestration
3
Office of the Law Revision Counsel. 28 USC 3101 – Prejudgment Remedies
4
U.S. Marshals Service. Writ of Sequestration
5
GovInfo. 28 USC 3014 – Exempt Property
6
Office of the Law Revision Counsel. 28 US Code 3103 – Receivership