by NotMicroButSoft (Back-in-Town)

Article by Peter Wendt

If you owe money to a creditor, it has the legal right to bring the matter to conciliation court and win a judgment against you. This situation can also occur between individuals, such as when a landlord sues a tenant for unpaid rent or a relative sues for repayment of a personal loan. The person or company requesting the judgment must show proof that you owe the debt. If a judgment is granted, the creditor has several ways to obtain money from you, including placing a lien on your house or car, garnishment of wages and a levy on your bank account.

How a Creditor Can Legally Take Your Funds

After the judgment has been granted against you, the creditor who sued can request that the court provide an order for garnishment that allows the seizure of funds in your bank account. It is important to remember that conciliation court does not collect funds for the creditor. Instead, it provides the creditor with the legal means to do so. If you do not voluntarily provide your bank account information, the creditor may obtain it by hiring a private investigator or reviewing your credit report. Once your account has been located, the creditor can present the bank with a garnishment order to freeze your funds.

Banks Must Legally Comply with a Court Order

The bank receiving the garnishment order has the legal obligation to act on it. What this means for you is that your funds will be frozen and you will not be able to access them. If you write a check against the account or use your debit card, it could overdraft your account and you will be responsible for non-sufficient funds fees as well. Whether you receive notification regarding the freezing of your funds is dependent on the laws of your state of residence.

Exceptions and Ways to Avoid a Bank Account Levy

There are some funding sources that are exempt from being taken in a bank levy. These include veteran’s benefits, child support payments, social security benefits and possibly more depending on the laws of your state. If you receive payments from one of these sources, it is your responsibility to obtain an exemption from the judge who issued the garnishment order. You will need to show written proof stating how much you receive for these benefits and how often you receive them. You will then need to present your certificate of exemption to your bank.

Obviously, it is best to avoid this situation in the first place. If possible, try to work out a payment arrangement with your creditor. If that doesn’t work and a levy is placed on your bank account, you always have the right to appeal the decision.

About the Author

Peter Wendt is a writer and researcher specializing about Get Free of Bills. For readers who are interested in learning more about this subject, Peter recommends they check out GetFreeOfBills.com.

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