How Can Someone Garnish Your Bank Account?

If you have been sued for a debt you owe and a judgment has been issued against you, you must pay off that debt by court order. There are several avenues a creditor can take to ensure you pay, one of which is a garnishment of your bank account. A specific procedure must be followed by the creditor to effect this garnishment; you are not notified until your accounts have already been frozen.

Process

Though the names of the forms and courts vary from state to state, the process of freezing your bank account is essentially the same no matter where you live. A judgment is entered against you for a debt. The creditor then files a request with the court to freeze your bank account. This is known as a nonperiodic garnishment because it happens once. If the judge issues the writ, or order, the request for garnishment is sent to your bank, now the garnishee. It is required to freeze your funds until further notice. You are then served with a notice that your account has been frozen. This does not apply to debt owed to the federal government -- it doesn't need a court order.

Implications

If your account is frozen due to a garnishment order you do not have access to your funds. Outstanding checks and pending transactions are not honored. The garnishee must furnish the court with a form that discloses the assets over which he has control. You are notified that your account has been frozen after it has happened. You can object.

Valid Objections

You must have a qualifying reason to object. The fact that you can't afford it is not one of them. Valid reasons for an objection are: the garnishment wasn't properly issued; you are in bankruptcy proceedings; you have an existing installment agreement that barred asset freezes; the judgment was paid; or you have exempt funds in your account. To avoid losing more money, stop direct deposit payments until the issue is settled.

Exempt Income

Under federal law, most federal benefits are exempt from garnishment, unless the federal government is the creditor. Exempt benefits include, but are not limited to, Railroad Retirement, Social Security, federal and military pensions, Social Security Income payments, federal disaster assistance and student aid. Some states exempt other income not covered by federal law such as state pensions and child support. If you have exempt income in your bank account, you can write to the bank holding the funds and notify it that the income is exempt. Copy the creditor's attorney on the letter. You can challenge the freeze in court but you should bring copies of bank statements showing the deposits made were from exempt sources. Check with your state to determine what other rights you have regarding this issue as some states prohibit garnishment of funds below a certain amount. The writ, once served, can only take the money in the account from the time served to the court date. Your account is then unfrozen, but the creditor can come back and get another order, if the debt is not yet paid, until the statute of limitations runs out on collection.