If a debtor has become delinquent on their debt payments for long enough, creditors will eventually file a lawsuit against them and may win a judgment. With a judgment in place the creditor can garnish wages and get the right to use non wage garnishments which typically means they will seize bank accounts. If a creditor serves the debtor's bank a non-wage garnishment affidavit, the bank is required by law to hand over the debtor's money on deposit up to the amount owed to the creditor, even if that puts the debtor's bank account at a zero balance. For example if a debtor owed $3,000 and had $1,500 in their bank account, the non-wage garnishment could wipe out the account handing over the $1500 to creditors.
But there are things a debtor can do to protect their bank accounts from non-wage garnishments:
- Be aware of any lawsuits filed against you by creditors. If you are significantly delinquent on any debt payments, there will be a lawsuit, it is just a matter of time. If you are facing a lawsuit, don't ignore it. Show up to court and consider filing bankruptcy to stop the lawsuit. Bankruptcy will stop the lawsuit and prevent a non-wage garnishment before it happens.
- Don't deposit all of your money into your bank account. Yes, we know that is inconvenient; but depositing money into your bank account gives the creditor access to your funds. Consider paying your bills using money orders until you can sort out your financial affairs. Also, consider filing bankruptcy if you have large amounts of debt that you simply cannot pay.
- If a creditor has already won a judgment against you, consider challenging the validity of that judgment. Were you served properly? Many creditors fail to properly serve debtors when they file a lawsuit leaving the debtor unaware of litigation. If a creditor failed to serve you, you may be able to have the judgment thrown out. Has the statute of limitations passed? In Texas, credit card companies have only four years to sue a debtor for non-payment. If the creditor files a lawsuit after the statute of limitations has expired, the debtor can have that judgment thrown out.