It’s the last thing you want to happen, but since you know all too well that you’re delinquent on a debt, you know it’s possible that bank garnishment may be on the horizon. You have nightmares in which you go to retrieve cash from an ATM, only to find that a withdrawal is impossible.
Well, there are ways to skirt such a scenario — in case you didn’t know. Here’s how to prevent debt collector bank garnishment, and what to do should one occur.
What is Bank Garnishment?
A bank garnishment is a court order secured by a creditor or debt collector to freeze your account and allow monies to be withdrawn to satisfy, partially or in full, your obligation. This typically occurs following a lawsuit, then a court judgment, against you.
Are Such Garnishments the Same Everywhere?
No, they vary according to your state of residence. You may have between five days and a month to object to wage garnishment, depending on the debt type, and again, where you live.
Can They Take All My Money?
How much debt collectors can take from your account hinges on your state of residence. In California, for instance, $1,788 is automatically protected from garnishment. The protected sum in the Golden State must be adjusted each year for inflation.
Is a Court Order Mandatory?
A court order is usually required for access to your account. Note that certain federal agencies, including the Internal Revenue Service, may be able to gain access to your account without a court’s permission.
Also note that a creditor isn’t required to inform you that your bank account is frozen – after a judgment has been made against you. You only must be notified that you are being sued, and that a judgment has been issued against you.
A Garnishment Has Been Ordered. Now What?
There are different types of bank garnishments, but in general, you’ll receive paperwork that accompanies the judgment notification that includes information about how the process works, how to challenge the garnishment, the length of time you have before garnishment starts, and where to submit your challenge. Check out this site for more debt collector garnishment information.
With bank levies, which is a type of non-wage garnishment, collectors can simply take cash from your account. You can still object after garnishment gas begun, but you’ll lose any money that’s already been taken from your account.
Objecting to a Garnishment
Note that most federal benefits — including Social Security benefits, child support, alimony, retirement funds, or federal student aid — are exempt from garnishment.
Also, a legit reason for objecting to garnishment is that such a move would leave you unable to afford basic life necessities. It’s up to you to prove your defense.
Also, each state sets a cap on how much may be garnished from your bank account. However, federal law trumps state laws. Under federal law, no more than 25 percent of your net income may be garnished. If it’s state or federal taxes, or bankruptcy settlements, or study loan or child support that you owe, however, that percent increases. Your garnishment will continue until the debt is cleared, or until a certain date.
How Can I Prevent Debt Collector Bank Garnishment?
Naturally, the best and easiest way to prevent debt collector bank garnishment is by consistently paying your obligations on time. If you do run into trouble, contact your creditors to see whether something can’t be worked out.
If you’re in an acute financial situation and collectors are already breathing down your back, debt settlement may be the best solution for you. We recommend Freedom Debt Relief, for its experience, reputation, and credibility. How to Buy a House After Bankruptcy