Can a creditor garnish money from a bank account?

by Andy Miofsky, Esq.

August 20, 2010

Creditors typically garnish an account to collect a debt after obtaining a judgment.  If a creditor files a non-wage garnishment affidavit upon a bank that holds your money, the bank can be forced to pay that creditor what ever money is on deposit in your account, up to the amount of the judgment.  There amount garnished is not limited and the account can be drained to zero if the judgment meets or exceeds the amount on deposit.  A non-wage garnishment differs from a wage garnishment, also known as a payroll garnishment, in that the rock on a paycheck is limited by federal law to an amount sufficient to  leave a person money to live off.  The non-wage garnish is not restricted to any amount, other than the amount of the judgment.  Also, a non-wage garnishment may not levy against social security funds in the account and states such as Missouri protect unemployment from garnishment.

While a bankruptcy will stop a creditor from garnishing your wages, it may not prevent non-wage garnishment of money held by another person or financial institution.  In some states, the garnishment is treated as a secured claim against the garnished property and some states do not protect or exempt already garnished funds.

Many debtors learn this lesson the hard way.  Money saved in an account is fair game for the debt collector.  So what is a person to do?  Protect your money and make it untouchable.   If you owe a judgment, naturally  you are aware the collector is trying to collect money from you.  Do not turn a blind eye to the collection process.  So long as you owe debt, your assets are vulnerable.  If you deposit money into an account, you expose that money to being garnished.  Likewise, the converse if true.  If you do not have money on deposit or held by someone for you, you a non-wage garnishment is of no consequence.

If your source of income comes from a paycheck you may need to use a check cashing service until you can get the judgment released.  If you cash your check and hold the money in hand, there is no one to serve with a non-wage garnishment.  By holding cash, you avoid placing money on deposit.   You are unable to use a personal checking account, however, you directly control the use of your money.  You can obtain money orders to pay bills, or you can pay bills in cash.

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Andy Miofsky, Esq.

Andy Miofsky is an Illinois consumer rights lawyer with offices in Granite City Illinois and Mount Vernon. Andy represents people with bankruptcy and student loan debt problems throughout the Central and the Southern District of Illinois since 1979.

Last modified: September 14, 2013