How to stop bank account garnishments? Is it better to prevent one in the first place?

When the court of law orders a third party to withhold your money or seize your property in order to make payments to a creditor whom you haven’t repaid, the setting is referred to as garnishment. Wage garnishment is when your employer is instructed to make deductions from your paycheck whereas bank account garnishment is when the financial institution is directed to withdraw the money deposited in your account.

Certain life events, lack of resources, or even forgetfulness may lead to delay of payments to creditors. One must know how to stop a garnishment to ensure that their living standard is not drastically affected. This is what we will be focusing on, in the rest of the article.

How to avoid garnishment?

Before obtaining their payment via garnishing your salary or bank account, creditors need permission from the court. This means that they would be required to file a lawsuit against you. Under such circumstances, you will automatically be notified that inability to repay will call for garnishment. One of the strategies you may adopt is to make the payment in question at that point and close the matter.

Your second chance to avoid garnishment is responding to the Demand Letter in a timely manner. In case you are wondering what a Demand Letter is, be informed that even after the judgment has been made in favor of the creditor(s), they are required to send you a warning letter as a last resort before proceeding with the process of extracting your resources via a third party.

This opportunity can be used to make negotiations with your lender. Even if you are unable to pay the amount in full at that point, you can devise a payment plan with mutual consent. This is usually preferred by the creditors as well because they too, want to avoid lengthy processes, paperwork, time, and costs involved in the garnishment. Thus, one must never ignore the Demand Letter.

Understanding bank account garnishment

Bank account garnishment might be a bit more complicated than a wage garnishment. In the latter, you receive the paycheck after the deduction has already been made by your employer who sends the amount to the creditor as instructed by the court. Thus, you are aware that the withdrawal has been made. However, in the case of bank account garnishment, the bank is liable to comply with the court order and make payments from your account to the creditor, but it has no obligation to inform you when the withdrawal is made. If anything, you may receive notification for an overdraft if the amount paid to your lenders exceeds your bank balance.

However, if you receive certain federal benefits in your account, they may be exempted from garnishment. Other than that, the bank will prioritize repaying your debts in view of the garnishment order received over honoring other transactions requested by you, or on your behalf.

How to stop bank account garnishments?

As mentioned before, the best approach would be to avoid garnishment in the first place via carrying out negotiations with creditors themselves or the collection agency. However, you must also know how to stop a garnishment after it starts, in case you are unable to reach an agreement with the opposing party.

Object to the garnishment

If you feel that the judgment is wrong, or that abiding by it will expose you to a financial crisis, you can make an objection. However, doing so will require you to file your concerns with the court in writing. Therefore, you must consult a professional attorney before challenging the court’s decision. In case you are unable to afford legal help, you may approach legal aid offices that provide services either for free or at discounted rates.

Furthermore, the need to react urgently must be kept in mind. One must respond within a certain number of days (which may vary in different states) in order to ensure that the amount is not deducted from your bank account. In case of bank account garnishments, it is usually between 5-10 business days. Although you may raise the objection after this time period has lapsed, any deduction made from your bank account after the deadline will not be reimbursed.

File for bankruptcy

When considering how to stop a garnishment, filing for bankruptcy must be the last option on your list.

Although making this declaration would cease pressure from all the creditors who might be continuously sending letters, calling, or filing garnishment cases against you in order to recover their payment there is no surety that your debt will be discharged. You might still be owing to your lenders the money after bankruptcy. The creditors have the option of requesting the court to lift the injunction from you but whether it agrees to do so or not is at the court’s discretion and is subject to special circumstances.

Now that you have understood how to stop bank account garnishments and what is the difference between them and wage garnishments, you might be better able to plan borrowing arrangements. We will conclude the discussion by again stressing over the fact that making attempts to prevent a garnishment will make your life much easier as compared to finding answers to the question: “how to stop a garnishment after it has started” because the latter has many conditions and complications involved.