Stopping a Savings Account Lien

If you do not repay a debt, a creditor can legally place a lien on your savings account. The creditor must first go to court and sue you for the unpaid debt and win the case. The creditor may then place a lien on your bank account and seize the funds directly from it, to cover the unpaid debt. If you currently owe a debt and you have a savings account in your name, there is a way to protect your funds from being garnished. Learn the proper way to stop a savings account lien.

Instructions

1

Contact the creditor to discuss your options. Try to negotiate a settlement offer or payment plan with the creditor. Depending on your current financial situation, the creditor may reduce the amount of debt you owe or allow you to pay off your debt over an extended period of time. Be honest with your creditor and let him know exactly how much you can afford to pay toward your past due debt.

2

Get the agreement in writing. Ask the creditor to send you a formal confirmation letter describing the terms and conditions of the payment arrangement. The letter should include details about your current balance, due dates and guidelines for the agreement.

3

Submit the appropriate payments to the creditor. It is important that you make every payment by the scheduled due date. If you fail to make your payments on time or if you skip payments, the creditor may proceed with a garnishment and place a lien on your savings account.

4

Pay your balance in full. Once you send the creditor your final payment, your account is paid in full and the creditor cannot seize the funds from your savings account. Make sure the creditor provides you with a letter confirming that your debt is paid in full.

5

Verify that the creditor updated your account information with the credit bureaus. Order your credit report online at AnnualCreditReport.com. You will need to obtain your credit report from all three major credit bureaus-Equifax, Experian and TransUnion. Review your credit reports and make sure that the creditor reported your payment information to each credit bureau. Please note it may take up to 30 days for the creditor to update your account information with the credit bureaus.