Can Collection Agencies Check Your Bank Account?

Although collection agencies can't simply look at your bank account any time they want, some circumstances do allow them to access your account. If you have given them permission to withdraw payments in the past, they have a way to access your funds. And if they file a lawsuit against you and win a judgment, they can take funds directly from your bank account provided they have your account information.

Ongoing Payments

Debt collectors can attempt to take money from your account if you have previously given them access to your bank information. In other words, if you have ever paid them with a debit card, or by giving them access to your checking or savings account, they may continue to take funds from that account. If this has happened, speak to your bank to find out how to block the collection agency from your account.

Judgments

Simply doing business as a collection agency does not give debt collectors the right to look at or access your bank account. They must have a legal judgment in order to garnish your funds; without a judgment, your bank won't allow them to take your money. Debt collectors can only get a judgment if they sue you in court and win; they can't simply state that you owe a debt, or that they are entitled to check your account balance or access your funds.

Exempt Funds

Even if a collection agency wins a judgment against you, some types of funds remain exempt from seizure. For instance, your bank is normally not allowed to release funds that come from Federal programs like Social Security. However, this exemption does not apply to government-related debts; if you default on a student loan, or owe child support payments, funds that are otherwise exempt can be confiscated.

Protecting your Accounts

Financial expert Dave Ramsey advises debtors to avoid providing collection agencies with debit card or bank account information. Even if you think you have reached a fair repayment schedule with the collection agency, it may use this information to access your account and collect as much of the debt as it can get.