Is Your Bank Account Garnished? You Can Get Help

Apr 21, 2021 | Bankruptcy

If your bank account is garnished, it is because a civil court has allowed a creditor or a collection agency to withdraw funds from your bank account to collect money for a debt in default. Creditors take this step only when they fail to settle debts via phone calls and mailed notices to debtors.

The Legal Process of Garnishing a Bank Account

The process begins when a lender or a collection agency files a lawsuit against you. At this stage, you have the option of defending the lawsuit. You also have the option of negotiating a settlement before the court reaches its verdict.

For a creditor to withdraw money from your bank account, it needs a judgment from a court. This comes in the form of a writ of garnishment that is signed by a court official. Once a creditor serves the writ of garnishment, your bank is legally obliged to freeze your account and hand over the money in your account to your creditor.

Unfortunately, banks might freeze accounts that don’t have your money simply because you have ownership interest. For instance, a bank may freeze your child’s bank account because you’re listed as a joint owner.

The only institution that does not need a court judgment to garnish money from your bank account is the Internal Revenue Service (IRS).

What You Can Do?

Upon receiving the writ, you get 10 days to file a claim of exemption. This basically involves you telling the court that the funds in your bank account at the time the levy was placed were protected or exempt from creditors. Exemptions vary depending on the state in which you live and might include part of your wages as well as Social Security, Veteran Affairs, unemployment, and child support payments.

Exemptions typically apply on specific sources of funds, so mingling incomes might not be a good idea. For instance, you should ideally keep you wages in a bank account that is separate from the one in which your spouse receives unemployment benefits.

Since filing a claim of exemption can be a complicated process, seeking assistance from a civil litigation attorney who specializes in this area might be in your best interest.

Preventing Levies in the Future

A levy on your bank account does not continue until your debt is settled completely. It only applies to the funds that are present in your account at the time of the garnishment. However, a creditor has the legal right to seek a garnishment of your bank account multiple times. As a result, you should consider keeping your money out of your bank accounts until you resolve your debts.

A levy on your bank account should serve as indication that a wage garnishment might follow, so it’s best that you consider resolving your debt at the earliest.

Challenging the Garnishment

Once you receive notification of the garnishment, and if you feel you have a suitable defense, you may choose the challenge the order in court. While it’s possible for you to defend your case on your own, hiring an attorney might work well for you. Even though this comes at a cost, it can actually help you save money as well as heartache. You also have the option of arriving at a payment arrangement with your creditor after the judgment.


The best way to avoid a garnishment is to contact your creditors ahead of time and come up with suitable repayment plans. If you find out that your bank account is about to be garnished because of a court order, your best bet is to contact an attorney who specializes in debt-related matters. For all you know, you might even be able to settle your debt.