Can a debt collector garnish my bank account or my wages?
If a debt collector has a court judgment, then it may be able to garnish your bank account or wages. Certain debts owed to the government may also result in garnishment, even without a judgment. However, if certain federal benefits are directly deposited into your bank account, there are automatic protections under federal law for some of the funds in your account.
Collecting judgments. All states have methods for collecting court judgments from debtors. Those methods may include wage garnishments and bank account garnishments. The court's judgment will state the amount of money you owe. The amount of money you owe could include the original debt as well as other fees or costs as determined by the court. A later court order may also state how much may be taken from your bank account or garnished from your wages.
Protections. State and federal laws have limits or “exemptions” that apply to bank account and wage garnishments, usually to make sure you have something left to live on. These exemptions vary by state, as do the procedures for claiming the exemptions.
If federal benefits, such as Social Security, SSI, VA, and others, are directly deposited into your bank account, there are additional protections under federal law for some of the funds in your account.
It's a good idea to seek legal advice if your wages are garnished or funds are frozen or removed from your bank account. There may also be legal aid offices or legal clinics in your area that will offer their services for free if you meet their criteria. Servicemembers should consult their local JAG office .
If you're having problems paying a debt, don't wait. You may want to consult a credit counselor before a debt collector takes an action like suing you. Credit counselors are organizations that can advise you on managing your money and debts, can help you develop a budget, and usually offer free educational materials and workshops. Credit counselors are usually non-profit organizations.
Tip: If possible, consult an attorney if you are sued.
An attorney can represent you if you are sued. Don’t wait until your case has gone to court to get legal help. You may be able to work out a repayment plan or negotiate a settlement. Once a court has issued a judgment against you it will be much harder and more costly to try to reverse a garnishment order. Your legal costs may end up being less overall if you engage an attorney at the start of the case than if you hire an attorney to help you after an order of garnishment has already been entered against you.
To find an attorney, you can contact a lawyer referral service in your area and ask for an attorney with experience in consumer law, debt collection defense, or the Fair Debt Collection Practices Act (FDCPA). Some attorneys may offer free services, or charge a reduced fee. There may also be legal aid offices or legal clinics in your area who will offer their services for free if you meet their criteria. Servicemembers should consult their local JAG office.