How Does a Collection Agency Find Out Your Bank Account?

If a collection agency wins a judgment against you, it may attempt to garnish your bank accounts. Collection agencies have several ways of getting information about your accounts, including information provided by the original creditor and asking you to complete a financial disclosure form in court.

Bank Garnishments

Bank account garnishments, sometimes known as levies, are a typical strategy for collecting debt. After a creditor wins a lawsuit against you, it can seize the money in your bank account to satisfy the debt. Depending on where you live, and the source of the money in your account, some of your account balance may be exempt from garnishment, though you will have to take action, such as providing written documentation to the court, your creditor and your bank, to protect those funds.

Financial Disclosure Forms

After winning a judgment, your creditor may ask you to complete a financial disclosure form. This form asks for information about your bank and investment accounts. In some places, you may be asked to fill out this form in court, in other places, you might receive the form in the mail. Your creditor will use this information to file a garnishment or levy on your accounts.

Other Methods

If you ever wrote a check to a collection agency or the original creditor, or disclosed information about your bank accounts in other paperwork, the collection agency can use this information to garnish your bank account. For example, if you ever signed up for your creditor's online payment option, you probably provided your bank account information so that your payments could be drafted directly from your checking account. That creditor, or its collection agency, can use that information to seize your funds after winning a court judgment.

Court Hearings

If a creditor sues you, do not miss court hearings connected with your case. If the court contacts you with a request to provide a financial disclosure, don't ignore the request or a summons to appear in court. In some areas, judges issue bench warrants for those who don't respond to the summons. People have been arrested and spent time in jail because they didn't attend a financial disclosure hearing or fill out the forms promptly.