How Much in a Bank Account Is Safe Against Garnishment Freezes?


Garnishment is a court order signed by a judge. It allows free access to a bank account to satisfy an unpaid debt. The debt collector can withdraw money in installments or in a lump sum. However, the debt collector can make withdrawals only up to the amount due on the debt, as listed in court records. Determining how much money in the bank account is safe, or protected, depends on the amount of the debt.


The garnishment process starts with the filing of a lawsuit. A judge hears the case and issues a legal order called a monetary judgment. The judge reaches the decision after deciding that the person sued failed to pay a debt or is financially liable for damages for some other action. Some judgments are called default judgments, and occur when the person sued fails to show for a court hearing. The absence forces the judge to award a default judgment.


The debt collector sends a copy of the garnishment order to the bank. Usually the debt collector identifies the debtor's bank by reviewing previous payments made on the account by check The routing number and account number provide all the information that the debt collector needs to find location information for the bank and start the garnishment process.


Banks and other financial institutions must comply with garnishment orders and usually will not contact the customer as a courtesy. The bank immediately freezes the account, which usually shuts off access to the account holder except for deposits. The debt collector then makes withdrawals for the full amount of the judgment. For example, say the account holder has a $2,500 balance in checking and the judgment is for $1,800. The debt collector can withdrawal the full $1,800 in a lump sum. In this case, this releases the account with the remaining $700 protected.


Entering into a settlement agreement is one way to end bank garnishment. The debt collector may agree to release the garnishment order in return for full payment in installments. However, the judgment order remains in effect, and the debt collector will likely return to court for a new garnishment order if the debtor fails to comply with the settlement agreement.

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