> Wouldn't the collector literally have to physically threaten the individual to transfer the BTC back, since it's not like they can get a court to order the bank to do it.

What makes you think the court can't order the bank to do it? The court can order you to give some assets up, and if you refuse, they can order your employer to deposit wages directly into creditor's accounts, or the creditor can seize other assets for nonpayment. (For example, some creditors managed to temporarily have an Argentinian Navy ship seized after their default.)