When a creditor is owed money, they may resort to obtaining a judgment against you and then attempting to collect on the judgment. One way to collect on a judgment is to garnish your bank account. While garnishing a bank account is legal, there are some income sources that are exempt from garnishment as well as state laws that exempt additional funds in many cases. If your bank account has been garnished, you may be able to stop, or lift, the garnishment order.
Garnishment Procedure
As a general rule, a creditor must file a lawsuit against you before they can garnish your bank account. The federal government, however, can garnish you without filing suit first. You must be notified that the lawsuit has been filed and given the chance to defend the lawsuit in court. If you do not defend the lawsuit, or do not win, the court will enter a judgment against you. At that point, the plaintiff, or creditor, may request the court order a garnishment of your bank account. If ordered, the court will forward a copy of the order to your bank. Your account will then be frozen until a hearing can be held to decide whether or not the money in your account can be used to satisfy the judgment.
Exemptions
In order to stop a bank garnishment, you have to have a legal reason to do so. Both federal and state laws may help. Federal law provides a minimum amount of protection for wages you earn; however, many states allow you to exempt considerably more than the federal rule. Some states also allow exemptions for dependents, disabled family members or heads of household. Federal law also protects most federal benefits from garnishment unless the garnishment is for a support order or for taxes. If the funds held in your account are covered under a state or federal exemption, then you should be able to lift the garnishment order.
Organizations That May Help
While there is not an official letter that you must use to prevent or lift a bank garnishment order, many state legal aid organizations provide helpful forms, letters or guides that you may use as a reference when you are faced with a bank garnishment. You may also choose to hire an attorney who will provide all the forms you will need. Contact your local legal aid organization or an attorney as soon as you are notified of the garnishment. You must appear at the hearing held on the garnishment if you wish to object or claim an exemption.
Prevention/Federal Benefit Exemption
If you know that you have an outstanding judgment against you, try and prevent a garnishment from happening instead of having to object after the fact. As a general rule, bank accounts into which federal benefits are direct deposited are protected up to the amount of the benefits. While your bank may recognize that on its own, it's a good idea to write to your bank explaining that your account receives monthly federal benefits via direct deposit and that you believe those funds are exempt from garnishment. The same may apply to state law exemptions. Simply explain in the letter what state exemptions you believe you are entitled to in the event the bank receives a garnishment order.
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