A Court Froze a Town Government's Bank Accounts Over Unpaid Construction Debts
Hujiafan town in Shaanxi lost a 10-million-yuan construction-contract lawsuit, defaulted on the settlement it signed, and had its basic-expenditure account re-frozen by an intermediate court — leaving staff without August salaries and suspending medical-insurance deductions.
The staff of a town government in Shaanxi province spent the last week of August waiting for a salary that never arrived. The reason was unusual even by the standards of China's local-debt troubles: a court had frozen Hujiafan town's bank accounts, because the town government itself was the debtor.
The case traces back to a construction contract. In 2024 the Shanyang County court heard a dispute in which a Shaanxi company sued the town over more than 10 million yuan in unpaid project fees — and won. The town missed the payment deadline, the company applied for compulsory enforcement, and the two sides then reached a settlement: the debt would be cleared in three installments, and the county court released the frozen account on the company's consent. When the town fell behind again, the case was escalated to the Shangluo Intermediate People's Court, which re-froze the account in July to compel payment.
Four town government staff confirmed to Jimu News that the freeze is real and that August salaries had not been paid, with medical-insurance deductions suspended too. One employee described the squeeze in concrete terms: young staff carrying mortgage and car payments are exposed first, and colleagues with illnesses cannot settle their medical bills normally. Others worried that payments owed to residents could also be caught in the freeze.
The town's own position, as its staff put it, is that the freeze is lawful — but the court should target idle or non-special-purpose funds rather than the account that keeps the government itself running. The town has now filed an objection to the enforcement. A source close to the Shangluo court told Jimu News the frozen account held only a few hundred thousand yuan, that no money had been transferred into it since July, and that the court would convene the parties, with a hearing if necessary — adding that the freeze exists precisely to protect a creditor's lawful rights, while the objection process protects the town's.
The story reached No. 43 on Baidu's hot board and drew wide comment because it stages the collision between two pressures China's smaller governments face at once: creditors who have waited years for money the courts have ordered paid, and a payroll that depends on the same frozen account. A town that cannot pay its debts and a town that cannot pay its staff are, this week, the same town.