Garnishing a bank account is one of the extreme steps that a creditor or collection agency may take to bring down a balance owing. It’s drastic, and it costs them money and is subject to a lengthy list of Florida statutes. But when a debtor owes a significant amount, it is one that they are willing to take. Bank garnishment is also called a “creditor’s account levy” and nobody gets one of these overnight, or without certain Florida laws being in force.
How It Starts
When you owe money on secured or unsecured debts, you’re going to be contacted by your creditor or a collection agency that they have sold your debt to after charging it off their books. Your debt being “charged off” simply means that your creditor does not think they can collect your debt and has written it off as a loss, then packaged it with other similar accounts for sale to a collection agency.
What Happens Next
Your creditor or an agency, sometimes even a law firm will get in touch with you by mail, phone, email, or even a summons. Some people who owe money think that if they can just fly under the radar or even ignore their debts that they will go away, and in some cases that’s correct – the amounts are too small for the agency or creditor to consider taking legal action. Others will try to run out the clock to the point where the debt becomes subject to the Florida statute of limitations. Again, that will work with debts where pursuing legal action has to be weighed against the amount of the debt and the likelihood of future collection.
However, when the debt is considered to be significant and there is a strong likelihood of being able to collect, an agency or creditor can go all in, take legal action, go to court, prove the debt is valid, and receive a judgement than may involve either garnishing your paycheck and your bank account. Only the IRS is empowered to garnish a bank account without going to court to do it. Your bank is not required to notify you of a bank garnishment unless your account goes down to zero or is overdrawn because of the action.
Your Rights After Judgement
If you are facing a bank garnishment and the debt is valid, you have the right to appeal under the following circumstances.
- Head of family wage earner who either provides a) more than 50 percent of the support for a child or other dependent and has net earnings of $750 or less per week or b) provides more than fifty percent of the support for a child or other dependent, and has net earnings of more than $750 per week, but has not agreed in writing to garnishment.
- Account is the receiving account for Social Security benefits, Supplemental Security Income benefits, other disability income benefits, or public assistance benefits including general relief or other welfare.
- Account is the receiving account for Workers’ Compensation payments.
- Account is the receiving account for re-employment assistance or unemployment compensation.
- Account is the receiving account for veterans’ benefits.
- The account is a retirement account or the receiving account for profit-sharing benefits or pension money.
- The account holds life insurance benefits, cash payment for a surrendered life insurance policy, or payments from an annuity contract.
- The account is a prepaid 529 college trust fund or a medical savings account.
- Improper service is a term used when the summons is sent to an old address or is given “sewer service,” overshadows a defendant’s rights under state or federal law, or otherwise violates the defendant’s right to know that they are being sued.
If you have no grounds for appeal, the creditor can levy your bank account to zero, and more than that can levy repeatedly until the debt is paid. They may also garnish wages and other property. You can’t time this out, the statute of limitations keeps a judgment alive for twenty years and judgment liens can be renewed every ten years.
What Can Stop a Bank Garnishment?
Beyond a successful trial outcome or appeal, there is not much that you can do to prevent the bank garnishment from going forward. However, if your debt picture is overwhelming and you are being pinched tighter and tighter simply trying to service your debt there is one thing that will stop a bank garnishment like a stone wall.
When you file for bankruptcy, the court protects your property and money from any action of collection – liens, judgments, collection calls and letters, all of it stops while the bankruptcy is in process. This is called the automatic stay, and it can get you the breathing room that you need when you’re drowning in debt.
Not a Tactic – A Solution
Filing for bankruptcy is not a stalling tactic, and you should not file for bankruptcy unless you actually need to do so. The court takes a dim view of people gaming the system. However, when you need Chapter 11 (a reorganization bankruptcy) or a Chapter 7 (a liquidation bankruptcy), you can get a fresh start and have your debts discharged by law.
Your creditors might get much less than they want, and may contest your bankruptcy plan in your 341 meeting, but you will be able to exit bankruptcy free of debt – and the debts discharged in bankruptcy can’t be revived by law.
Call Us! We Know How to Help!
At Van Horn Law Group we know about all kinds of debt, how to get collection actions off your back, and can defend your rights. Talk to us before things get to the point of garnishments and liens. Our offices in West Palm Beach and Fort Lauderdale are open Monday through Saturday, and walk-ins are welcome. Even better, your first consultation is free. We’ll even open on Sunday if you want to make an appointment. Get in touch, and get started on getting debt off your back and garnishments stopped cold. We’re here to help!