If you’re wondering how to protect your bank account, chances are a decision has made against you by a creditor. If a creditor obtains a judgment against you, they can garnish your bank account. That means they have obtained the right to dip into your savings and retrieve any money that’s owed them. It’s possible to wake up one day with your bank account completely cleaned out. Suddenly, you and your family are living check to check, trying to figure out what your next move will be. Luckily, a little bit of planning can help you protect yourself.
Burke Smith Law helps families protect their assets when creditors come calling. If you’re in a tight spot, give us a call at (402) 512-5490 and we can set you on a path that stabilizes your finances.
What to Do When a Creditor Tries to Garnish Your Bank Account
When a creditor garnishes your bank account, they are required to inform you that a judgment has been made against you. They don’t always, and we’ll get to that in a bit.
The Money Is Protected by Law or Does Not Belong to You
Once you know the judgment has been made against you, you can move to protect your money.
Firstly, when the creditor serves you with a garnishment summons, you receive a form that has three checkboxes. One of those is “objection”. This must be filed within 3 days of the receipt of the summons.
In some instances, the monies that the creditor wants to garnish cannot be garnished by law. Those include:
- Social Security or disability benefits
- Unemployment benefits
- Money from an injury lawsuit
- Veterans benefits
- Retirement accounts
- Child support payments
- Workers’ comp payments
- Life insurance payments
In addition, money that is held in an account that does not actually belong to you cannot be levied. For instance, if you’ve opened an account for a child who is using the account to deposit money, then you can provide the child’s paystubs at the hearing.
It bears noting that all the monies held in the account must be of a protected class.
Your Property Is Exempt Based on Its Total Value
You can claim that the money in your bank account is exempt based on the total value of your property. You will need a lawyer to represent you in order to make this claim. It’s a complex motion that requires a lot of paperwork.
Basically, you will claim that the garnishment will produce undue hardship.
Quashing a Bank Levy After the Fact
Some folks figure out how to protect their bank account the hard way. That is to say, after the judgment has been made against them. Legally, when a creditor moves to levy your bank account, they must serve you with papers to announce the judgment. This gives you 3 days to object or file for bankruptcy and stop the levy in its tracks.
Knowing this, unethical creditors fail to deliver notice of the judgment, or deliver it to an old address. This does not give the individual against whom the judgment has been filed time to react. They wake up one morning and all their money is simply gone.
This is known as a “gutter service” because the notice is simply ditched. It’s illegal, but it’s common because it forces the debtor into proving the negative argument “I never received notice of a judgment filed against me.” How do you prove that?
Better question still, what can you do?
How to Protect Your Bank Account After It Has Been Levied
There’s no easy way to say this, but at this point, your options are very limited. The first thing you want to do is contact a bankruptcy lawyer. Then, they will help you through the next part of the process.
File for Bankruptcy
You may be able to get back at least some, if not all, of the money that was levied against you if you immediately file bankruptcy. Most folks are so confused trying to track down what happened that it takes them a bit to orient themselves. Obviously, the best scenario, if you choose to file for bankruptcy is to contact a bankruptcy attorney before the levy.
Contest the Lawsuit
If the creditor’s judgment is too old to contest then this option is off the table. If you were improperly served, however, you might be able to have the judgment deferred. It will depend on whether the judge believes you.
Avoid Using the Bank Account
If the levy the creditor put on your account doesn’t pay off the entire debt, you should avoid using the bank account. They can keep levying the funds until the debt is paid in full. At this point, the question of how to protect your bank account is: you can’t. You’re just trying to protect your money.
Contact a Bankruptcy Lawyer Today
If you’re worried about how to protect your bank account from creditors, Burke Smith Law can help. Contact us today.