Can a Debt Collector Garnish Wages After Writ of Garnishment on a Bank Account?

Creditors typically attempt to collect on delinquent accounts by sending demand letters and making telephone calls; however, if you ignore a creditor or refuse to make satisfactory repayment arrangements, a creditor may opt for more aggressive action. Ultimately, this may include freezing your bank accounts under a writ of garnishment. In some cases, a creditor may also garnish your wages, even if it has already frozen your bank account under a writ of garnishment.

Reasoning

A creditor usually either garnishes your income or freezes your bank accounts, but not both. This is because most debtors deposit their earnings in their bank accounts, so executing both types of garnishment effectively violates federal and state wage garnishment limitations. However, a creditor may opt for both actions if your bank account contains nonexempt funds not derived from your employment earnings. This prevents you from withholding funds that your creditor could legally apply toward your unpaid debt.

Garnishment Process

Creditors must take certain steps before legally garnishing your wages or your bank account balances. A private creditor must file a lawsuit, typically in the civil court of the county where you live, to obtain a money judgment against you. After obtaining a judgment, it must typically apply for a writ of garnishment, which allows the creditor to execute a bank account or wage garnishment. The creditor must then send your bank or employer a written order demanding withholding of funds not protected by federal or state law.

Wage Garnishment Exemptions

Regardless of whether a creditor has executed a bank account garnishment, federal and state laws mandate wage garnishment exemptions. Under federal law, 75 percent of your wages are protected from garnishment. If your weekly earnings are less than 30 times the federal minimum hourly wage, 100 percent of your wages are exempt. State laws may place additional restrictions on wage garnishment. North Carolina, South Carolina, Pennsylvania and Texas prohibit wage garnishment for debts except taxes, child support and alimony.

Debtor's Examination

Most states permit judgment creditors to request a debtor's examination, which is an informal deposition or a formal hearing during which the debtor must disclose all assets and sources of income. This can be useful for a judgment creditor to determine whether garnishing both a debtor's bank accounts and wages expedites payment of a judgment debt. A debtor's examination can also be useful for the debtor; it allows you to show that garnishment of both wages and bank assets would constitute a severe financial hardship, which may prevent the judgment creditor from taking both actions.