UPDATE 1-BlueHippo Funding LLC files for Chapter 11

* Cites freezing of accounts by its payment processor's bank

* Lists total assets in range of $10 mln to $50 mln

* Lists total liabilities in range of $10 mln to $50 mln

Nov 24 (Reuters) - U.S. direct response marketing company BlueHippo Funding LLC filed for Chapter 11 bankruptcy, citing a sudden freezing of accounts by the company's payment processor's bank.

BlueHippo said its bank froze funds without warning due to a statement by the Federal State Commission (FTC) that it was seeking to amend a $3.5 million settlement with the company.

On Nov. 15, BlueHippo said the FTC filed legal papers in an attempt to change the terms of an agreement in April 2008.

In a filing with the U.S. Bankruptcy Court for the District of Delaware on Monday, the specialty merchandise lending company listed estimated assets and liabilities in the range of $10 million to $50 million.

BlueHippo was founded in 2003 to provide an alternative for people with limited financing options due to less than perfect credit or no credit at all, according to its website.

The case is In re: BlueHippo Funding LLC, U.S. Bankruptcy Court, District of Delaware. No. 09-14154. (Reporting by Deepti Govind in Bangalore; Editing by Muralikumar Anantharaman) ((deepti.govind@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: deepti.govind.reuters.com@reuters.net))