If you have failed to meet debts lately, your creditor can file for a bank account garnishment. It means that they have sued you, and they can withdraw money through an agency from the bank account to meet the debts.
Now that your account has been garnished, a lot of questions must be in your mind. What to do next? How to handle the situation? Today we will be covering such aspects of bank account garnishment to render you the detailed information.
What is Bank Account Garnishment?
In Bank Account Garnishment, a third-party collection agency is directed to withdraw money from the bank account. They do so to pay a debt-owned account holder.
Creditors usually opt for this method when the debt holders refuse to pay the money, despite their notifications. Then, as per the law, creditors should win a judgment to garnish the bank account.
Before crediting any amount from a bank account, an order or writ of garnishment is necessary from the court. IRS or the Internal Revenue Services is the only individual that can withdraw or garnish any amount without a judgment.
Can A Bank Account Be Garnished Without Any Notice?
As soon as the garnishment gets a green signal from the court, you will receive a notification from the creditor. They will reach you before your bank to initiate the garnishment process.
The bank is not obligated to inform you about the money withdrawal. However, if the account balance exceeds the garnishment amount, you will get an automated overdraft notification.
Once the bank receives notification, they will have to work as per the court order. It is applicable for any further transactions.
The last two months’ deposits will be reviewed for people getting federal benefits as per federal law. In addition, it will help to identify the exempt deposits.
What Happens When the Account Gets Garnished?
With the initiation of garnishment, the money that is not exempted will be seized. In addition, non-sufficient Fund or NSF fees may be charged if more amount is withdrawn than the balance.
Regardless of you having overdraft protection, the bank has to complete the transaction. It will continue until the garnishment is fulfilled.
There are various rules conjugated with the account garnishments. You will not lose the entire balance with the garnishments.
While it may vary with location, many states provide a limit as per the disposable income. Having said that, some incomes have protection against garnishment.
Account Garnished? What’s Next?
Now that your account has been garnished, you have to lift it. For that, you should ask the agency that is collecting the amount and ask them for an alternative means.
For a limited time, you might get the chance to decrease the interest payments or the owed amount. You can also try payments through partial means for some time.
If you can, it’s best to act before the judgment. Reach out to the creditor and make requests. Nothing is as helpful as retaining any garnishment beforehand.
Now, if the garnishment looks faulty, errored, or improper, you can challenge the judgment. For that, you can reach a lawyer and act within five business days.
It’s recommended not to delay the process any further. You can also file for bankruptcy to retain garnishment. However, this should be the last option.
Besides, filing for bankruptcy does not mean that you do not have any debt. You are still accounting for paying money after bankruptcy.
Conclusion
So, this was all about bank account garnishment with the steps to follow for further process. Hopefully, you understood the procedure precisely. If you liked this article, plunge into our other blogs for related content.