What Is Bank Account Garnishment and How Does It Work?

A bank account garnishment is a legal tool that creditors use to collect unpaid debts by directly withdrawing funds from a debtor’s bank account.

In Florida, garnishment can happen after a creditor has won a lawsuit and obtained a court judgment, which confirms the debtor owes a specific amount of money. The court can then issue a garnishment order, allowing the creditor to take funds from the debtor’s bank account.

A bank garnishment can create immediate financial strain for the debtor, as the bank must freeze the account until the funds are handed over to the creditor.

How Bank Account Garnishment Works in Florida

Here are the steps to bank account garnishment:

1. Court Judgment

The garnishment process starts when a creditor sues a debtor over an unpaid debt. This could be for credit card bills, medical expenses, personal loans, or other unsecured debts. If the court rules in favor of the creditor, the creditor is awarded a judgment for the amount owed.

2. Writ of Garnishment

Once a creditor has the court judgment, they can apply for a writ of garnishment, which is a court order directed at the debtor’s bank. This order requires the bank to freeze the debtor’s account and hold the funds until further notice.

The writ of garnishment must include the amount owed on the judgment, the debtor’s name, and the bank where the debtor holds their account.

3. Freezing the Account

After receiving the writ of garnishment, the bank must freeze the debtor’s account by law.

This means the debtor cannot access the funds in the account while the garnishment is pending. The bank will notify the debtor that the account has been frozen and provide instructions on how to respond.

The bank can hold up the double the amount of the judgment.

4. Debtor Notification

The debtor is notified of the garnishment through a document called a “Notice of Garnishment.” This notice outlines the creditor’s claim, the amount being garnished, and the timeline for the debtor to respond or challenge the garnishment.

The creditor must include a copy of the motion for writ of garnishmet and a notice regarding the debtor’s rights.

The debtor has 20 days to file a response, such as claiming an exemption or objecting to the garnishment.

5. Objections and Exemptions

If the debtor believes that their bank account should not be garnished, they can file an objection with the court or claim an exemption.

Florida law allows certain types of income to be protected from garnishment. If the debtor wants to take advantage of these exemptions, the debtor must file a Claim of Exemption form.

6. Release of Funds

If the debtor does not file a Claim of Exemption or successfully challenge the garnishment, the bank will release the frozen funds to the creditor. Once this occurs, the creditor applies the garnished amount to the outstanding judgment.

Exemptions to Bank Account Garnishment

Florida law provides several exemptions that protect certain types of funds from being garnished from bank accounts.

If you are the head of your family, meaning you provide more than half of the financial support for someone else, the entirety of your wages are exempt from garnishment. The exemption applies even after the wages are deposited into your bank account.

In addition, federal law prohibits creditors from garnishing Social Security benefits, Supplemental Security Income (SSI), and most disability benefits. These funds are exempt as long as they remain in the account and are not mixed with non-exempt funds.

You must file a Claim of Exemption form indicating the applicable exemption in order to claim it.

You can also try to open a bank account that no creditor can touch.

How to Stop a Bank Account Garnishment

If your bank account is garnished, there are four steps you can take to stop the garnishment.

1. File a Claim of Exemption

If the money in your account is protected by an exemption, you can file a Claim of Exemption with the court. This form will outline why the funds in your account should be protected from garnishment.

For example, you would file this form if your account contains Social Security benefits or wages that qualify under the head of family exemption. Once the claim is filed, the court will schedule a hearing to decide if the exemption applies.

2. Object to the Garnishment

If you believe that the garnishment is improper or that the creditor did not follow the correct legal procedure, you can file motion to dissolve the garnishment. In this case, you would need to show a legal basis for why the garnishment should be dismissed.

3. Negotiate with the Creditor

Sometimes, creditors are willing to negotiate a payment plan or settle the debt. If you can reach an agreement with the creditor, they may agree to release the garnishment.

4. File for Bankruptcy

Filing for bankruptcy can stop garnishment under an automatic stay. When a debtor files for bankruptcy, an automatic stay goes into effect, preventing creditors from collecting on most debts, including garnishments.

The bank garnishment will be put on hold once a bankruptcy is filed. Any funds held by the bank would become part of the Chapter 7 bankruptcy estate.

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How Much Can Be Garnished from a Bank Account?

In most situations, a creditor can take all of the money from your bank account through a garnishment, up to the amount of the judgment. Exempt funds cannot be taken. In addition, money in your bank account that was deposited by a non-debtor who is co-owner of a joint bank account may be released from the garnishment freeze.

The non-debtor must go to court to assert ownership of their money in the joint bank account. For example, suppose a judgment debtor and their elderly parent are joint owners of a bank account. In that case, the judgment debtor may defeat the garnishment by asserting that the funds do not belong to them despite their name appearing on the account title.

How Long Does It Take to Garnish a Bank Account?

A creditor can apply for a bank account garnishment as soon as a money judgment is finalized. In practice, a creditor usually waits at minimum 1-2 weeks.

Once the garnishment process starts, it can take 2-3 months to resolve fully until the account is unfrozen.

Can You Still Open a New Account During a Bank Garnishment?

When your bank account is garnished, you can still open a new account. A bank account garnishment against one bank does not prevent you from opening other bank accounts.