Can a Bank Account Be Garnished?
- A creditor may issue a bank levy to garnish your bank account for the collection of a past due debt. Your financial institution is not required to provide you with advance written or verbal notice of a garnishment. Once a garnishment is placed on your bank account, you no longer have access to your funds. There is no limit to the amount of money a creditor can withdraw from your bank account; however, a creditor cannot exceed the limit of the levying order.
- Your creditor can find your financial institution by performing a "skip trace," a process whereby your creditor contacts financial institutions in your county of residence and/or county of employment and asks if you own a bank account. Your financial institution does not provide your account details, but is permitted by law to confirm that you are an account holder at the institution.
- Your creditor must obtain a court order to garnish your bank account. Once the order is received, your creditor must serve your financial institution with a writ of execution, an instrument required to initiate a bank levy. Once a writ is served, your financial institution is permitted by law to withhold the funds in your bank account until the limit of the levying order is reached. According to Justin Harelik, a bankruptcy adviser for BankRate.com, "Your account gets drained to the limit of the levying order and, after a 21-day holding period, the creditor gets the money."
- Depending on the severity of your debt, you may be able to negotiate directly with a creditor to arrange a repayment schedule. If you cannot arrange a repayment schedule or your creditor refuses to accept your offer, you'll have to wait until the levying order is complete before you can regain access to your bank account.