How to Protect Your Money in a Bank From Garnishment

When a creditor sues a debtor and obtains a judgment for the amount of money due, the creditor must then collect on the judgment. State laws differ regarding what post-judgment collection remedies are available to a judgment creditor, but in most cases the holder of a judgment may request the court to order the garnishment of any funds held in the debtor's name by a financial institution. Both federal and state laws may protect funds held in a financial institution from garnishment.

Instructions

1

Identify the source of the funds held in the bank. Many federal and state laws protect specific funds from garnishment. For this reason, determining where the funds came from may be critical to protecting them from garnishment. Federal law prohibits the garnishment of Social Security payments, public assistance, unemployment, retirement payments, veterans benefits, worker's compensation and black lung benefit payments. Federal law also protects income up to a certain amount ($154.50 as of 2011) per week. State laws may protect additional income or sources of income.

2

Read the paperwork that was served carefully. In order for a bank account to be garnished, the creditor must obtain a court order first in most jurisdictions. The request for the order must be served on you and the bank. You will have a limited amount of time to reply to the request or appear in court. Make sure that you respond within the allotted time frame or that you appear in court at the designated date and time. Failure to respond will allow the garnishment to proceed.

3

Research your state laws as they apply to bank garnishment. If the funds in your bank account are not protected by one of the federal exemptions, then a state exemption is your only option. State laws can be found online, at a local library or law library. You can also try contacting your local legal aid society for direction or advice on state law.

4

Prepare your response to the garnishment. Again, procedures may vary by jurisdiction, but in most cases you will be required to file a response to the request for the garnishment. Contact the court and ask if there are forms you may use. If not, the important thing is that you respond in some manner. A letter may suffice as long as it explains why you feel the funds in your bank are exempt from garnishment.

5

Contact your bank. Although a court response is usually required, you may also want to communicate with your bank. In some states you may be able to fill out and sign an affidavit with the bank that will lift the freeze and/or prevent further attempts at garnishment.