Can a Bank Account in Another State be Garnished?

A bank account held in another state cannot be garnished by a Florida court. Florida courts have consistently ruled that a valid garnishment requires both in-personam jurisdiction (over the person) and in-rem jurisdiction (over the property). This means that the court must have authority over both the judgment debtor and the specific bank account being targeted for garnishment.

In cases where the debtor’s bank account is located at a financial institution outside Florida, the court lacks in-rem jurisdiction, as it does not have authority over the out-of-state property. This is a critical limitation for Florida creditors seeking to enforce a judgment against an account held elsewhere. Without jurisdiction over the bank account, the Florida court cannot issue an effective order to garnish the funds in that account.

Creditors have occasionally attempted to challenge this rule by arguing that modern bank accounts are digital in nature and, therefore, lack a fixed location, suggesting that in-rem jurisdiction should not be a barrier. This argument is based on the idea that electronic banking and digital transactions make it difficult to pinpoint a physical location for funds.

However, Florida courts have rejected this line of reasoning, reaffirming the traditional requirement of in-rem jurisdiction. According to the courts, despite the digital nature of banking, accounts are still considered to be located where the bank’s branch is physically situated or where the account agreement specifies.

Some federal courts in Florida have ruled that a judgment creditor cannot garnish an account at a national bank incorporated outside of Florida, even if the bank has branches in the state, because the national bank remains outside the Florida court’s jurisdiction.

In addition to the jurisdictional challenges, out-of-state banks may also resist compliance with Florida garnishment orders unless the creditor can secure an order from a court within the bank’s jurisdiction. This often requires the creditor to domesticate the Florida judgment in the other state before proceeding with garnishment efforts. Domestication involves registering the judgment in the state where the bank account is located, which can be a lengthy and complex process.

Ultimately, if a creditor wishes to pursue garnishment of a bank account in another state, they must generally initiate separate legal proceedings in the state where the bank operates.

One of the best strategies to protect cash accounts is to deposit funds in an out-of-state bank whose laws do not permit garnishments. If the state where the bank is located does not allow bank account garnishments, then a creditor will have a very difficult time seizing the funds to satisfy a judgment.