If a debt collector or creditor garnishes your wages or places a levy on your bank account, your ability to pay bills or afford basic necessities can be hindered. So it's smart to be diligent when paying back your overdue debts. Creditors gather your personal information by various means, and they can remove funds from your bank account once they gain access to your account number.
Definition
Bank account garnishments involve a creditor taking action to collect on an overdue debt. After several collection attempts, creditors can file a lawsuit and obtain a judgment order. Creditors then serve financial institutions with a garnishment order from a judge, and the bank levies or remove the funds.
Personal Checks
Debt collectors need bank-account information to garnish or levy funds from an account. Collectors can use the wealth of information on checks that were previously written by the debtor. This method for collecting personal account information works as long as the debtor keeps the account opened.
Searching for Your New Account
Debtors who suspect a potential levy or garnishment may close their personal bank account and open an account with another bank. This move, however, may not stop a bank levy or garnishment. Debt collectors with a garnishment order can contact banks in the debtor's locality. Banks cannot reveal personal information about a debtor. But if a creditor inquires as to whether the debtor has an active account with the bank, the bank must reveal this information. Debt collectors can enforce the garnishment upon locating your bank.
Considerations
After a debt collector locates your bank account and levies funds, consider communicating with the creditor to pay the debt -- perhaps through an installment plan -- and stop additional garnishments. Debt collectors can only remove available funds from your account. The initial removal of funds may not resolve the overdue balance. If you deposit additional money into the account, creditors may levy these funds as well.
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