What Are the Laws Regarding Bank Garnishments?


Quick Answer

Laws regarding bank garnishments include the ability for a creditor to garnish a bank account only after he receives a judgment against the debtor, the Federal Trade Commission notes. The creditor must sue the debtor and win a judgment and the right to garnish the debtor's bank account.

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Full Answer

The law also regulates certain types off income that are not subject to bank garnishment, even when the creditor is successful in obtaining a judgment, GarnnishmentLaws.org notes. This includes federal and state unearned income, such as unemployment benefits, welfare and Social Security. Exemptions apply when the judgement is for unpaid child support or delinquent taxes.

A 2011 federal law requires that banks that receive a garnishment order for an account holder who receives federal benefits must review the holder's deposits for the last two months, GarnishmentLaws.org advises. Those deposits are exempt if federal benefits are part of those deposits.

A garnishor is only able to take funds from an account that's not in the debtor's name in rare cases, GarnishmentLaws.org explains, but the law regarding accounts with more than one account holder varies by states. Some states allow the garnished amount to be taken as determined by who made account deposits. Other states don't allow the garnishment unless all the account holders are responsible for the debt.

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