Some bank garnishment laws include the exemption of some funds to be levied, such as Social Security payments and workers' compensation payments, explains AllLaw. The law allows a judgment creditor who may otherwise be exempt to seize the account if the account contains at least two months' worth of deposits.
A bank garnishment is when a creditor can take a portion of money in a debtor's account to pay for a debt, states Nolo. Generally, a court order is required, but the federal government can issue a garnishment without going through a court.
When the bank receives notice of a garnishment, the law mandates the bank to freeze the account. The funds in the account are used to pay the debt, and any remaining funds deposited into the account go toward the debt until the balance is paid in full, says Nolo.
Some states have laws that prohibit the garnishment of certain debts, notes Consumerfinance.gov. Some state laws also have limits on garnishments, to allow the account holder to have money to live on. The Department of Education and the IRS may place garnishments on wages for those who owe past due taxes or student loans, and there are very little options for creditors when those types of garnishments take place, notes Nolo.