Facts

• Most creditors use lawsuits as a last resort to recover debts from uncooperative consumers. If the debtor doesn't respond to the summons or raises a defense but loses the case, the court grants a judgment to the creditor in the amount it originally requested. In most states, the creditor may then use the judgment to request a writ of garnishment from the court and levy the debtor's bank accounts.
  
  

Significance

• Once a creditor obtains a writ of garnishment and serves the writ on the debtor's bank, the bank will freeze any accounts in the debtor's name. It will then notify the individual of the impending account garnishment. An account freeze prevents the debtor from withdrawing any funds from his account. It also prevents outstanding checks and debits from clearing. The debtor may, however, continue to make deposits while the account is frozen.
  
  

Time Frame

• According to Bankrate.com, a checking account freeze prior to garnishment lasts approximately 20 days. This time period gives the debtor an opportunity to contest the garnishment and have the freeze lifted from her checking account. Different states have varying regulations regarding the grounds under which a consumer may contest a bank account garnishment.
  
  

Considerations

• Although a creditor with a judgment can withdraw the full amount of the judgment from a debtor's checking account, it does not have the right to seize federal benefits. The Federal Trade Commission notes that consumers whose federal benefits have been frozen as the result of an impending bank account garnishment can notify the bank that their accounts contain exempt funds in order to have the freeze partially lifted. Federal benefits that are exempt from garnishment include, but are not limited to: Social Security payments, veterans' benefits, civil service payments and military annuities.
  
  Federal benefits, however, aren't the only funds exempt from garnishment. A debtor can also request the early release of child support payments, alimony, unemployment and public assistance payments.
  
  

Warning

• A creditor with a valid judgment can garnish any checking account in the debtor's name -- including a joint checking account that the debtor shares with another individual. State laws vary regarding how banks must handle the garnishment of joint accounts, but unless the joint account holder is aware of the garnishment and can provide proof of which funds belong to him, the creditor will typically seize the joint checking account in its entirety.