One of the most serious methods of debt collection used by debt collectors is wage garnishment. A creditor may choose to collect on a debt by filing a lawsuit against the debtor and then asking the judge to grant him a motion that will allow him to divert money from the debtor's paycheck. A bank can also do this if a person owes money from a checking account.
Bank Accounts
A person may get into debt with his bank in a number of ways. One of the most common is to overdraw money from his checking account. According to the contract that the account holder signed when he took out the account, he must pay this money back within a set period of time. If the person does not, he may be sued in court for the debt.
Negative Balance
When a person holds a negative balance on a checking account, this is just like taking out a bill from a creditor. if the person does not pay this money back, then the creditor may take measures to secure payment of it. This can include reporting the debt to a credit reporting agency, causing the person's credit rating to drop, and pursuing the garnishment of the person's wages.
Garnishment
Garnishment of wages by a bank works just like garnishment by any other party. When the bank attempts to garnish the wages, it will first seek to win a judgment in court that certifies that the debt is indeed owed to the bank. It will then, once again, request payment from the debtor. If the debtor still fails to pay, the bank may take further measures and ask the judge to allow it to garnish the person's wages.
Garnishment and Freezing
If a person has money in his account with the bank, then the bank will generally be allowed to take money directly out of the account to pay off this debt. While usually a creditor must receive an order to take money out of a person's account, this action is written into the bank's contract. However, the bank must still receive an order before it can garnish wages.
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