About Bank Account Garnishments

The Bank Account Garnishment Process

In the event that a bank receives a notice of a garnishment, they are required to immediately freeze the debtor's account for certain types of debts, known as "priority" debts. These include:

• Child support
• Spousal support
• Federal taxes
• Student loan debt
• Debts, charges, or overdraft fees to a specific bank

This automatic freeze is done to protect funds due to creditors, otherwise the debtor could withdraw or transfer all funds from their account. However, individuals still need to pay their rent, mortgage, and other bills, and need access to their funds to do so. So what should a bank do?

The American Bankers Association state "Banks are caught between the competing interests of the account holder and creditors. Thus, banks have no choice often except to place a hold on an account and let the debtor and creditor resolve the dispute. To address this, some states have regulations permitting access to certain levels of funds. Check with your state for this rules.

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