Bank Garnishments: What You Need To Know

Financial difficulty is very stressful and can do serious damage to your mental health. If you are in serious debt and do not have enough money to pay your creditors, the creditor can opt to garnish your account to obtain repayment. Unfortunately, garnishments are common when you cannot repay your debt. You might think there is no way out. However, you may be able to stop garnishments. Here is what you need to know.

Why Does a Creditor Garnish Wages?

Garnishment is another word for a bank levy. A bank levy occurs when creditors sue people for debts that are not repaid. If the creditor wins the lawsuit, garnishment can take place if the debtor does not have the money to pay the debt immediately. The garnishment is collected through both your bank accounts as well as liens on any property you may own.

How Does the Creditor Get Access to Your Accounts?

Once a creditor wins the lawsuit, they will serve your bank with a Writ of Garnishment. This is a legal document allowing a bank to freeze money in accounts you own, even if the accounts hold the money of other people, such as your children.

What Can You Do About a Garnishment?

If the garnishment moves forward, your bank will contact you about your account. The creditor has to give you a copy of the Writ of Garnishment. Once this happens, you can file a Claim of Exemption, which is a legal form that informs the court that the money in your account is not be accessed by creditors. Next, you will receive a hearing date to determine if some, all, or none of your money can be exempt from the garnishment. The court will look at your accounts and determine where the money came from. Depending on your circumstances, you may have some protection if the money in the account is from child support payments, disability payments, and the like.

How Can You Prevent Garnishment?

There are two ways to prevent garnishment. The first way is to pay your debt each month on time or pay the debt in full. The other way is through bankruptcy. Depending on the type of bankruptcy you file, the debt could be cleared from your finances, relieving you of having to pay it. It is best to take this step before garnishment happens to prevent more legal issues to contend with and to prevent losing access to all the money in your bank account.

For more information, contact bankruptcy attorneys near you.