Bank Garnishment in Florida: What to Do When Your Account Is Frozen
You try to use your debit card and it is declined. You log into your bank account and discover that money you expected to be available has been frozen. Or perhaps the bank tells you that it received a writ of garnishment connected to an old judgment.
The first question is usually the same: Can the creditor actually take the money in my account?
Not necessarily. A bank account being frozen does not automatically mean that the creditor is entitled to keep all of the money in the account. Florida and federal law protect certain funds from garnishment, and depending on the circumstances, you may be able to claim an exemption and protect some or all of the funds.
What matters now is determining what happened, where the money in the account came from, and whether any exemptions or other defenses may apply.
What Is a Bank Garnishment?
A bank garnishment is one method a judgment creditor may use to collect a judgment.
Obtaining a judgment and collecting that judgment are two different things. After a creditor obtains a judgment, it may pursue collection remedies allowed by law, which can include seeking a writ of garnishment directed to a bank where the judgment debtor has an account.
When a bank receives a writ of garnishment, funds in the account may become unavailable while the garnishment process moves forward.
But the fact that the bank has frozen funds does not necessarily determine whether those funds are ultimately available to the creditor. Exemptions, ownership of the money, and other issues may still need to be addressed.
Why Did My Bank Account Get Frozen?
A bank garnishment generally begins with an underlying lawsuit and judgment.
The lawsuit, the judgment, the writ of garnishment, and the freezing of the bank account are separate events. Sometimes the judgment was entered recently. Other times, someone discovers a garnishment involving a judgment entered years earlier.
Understanding the underlying case can therefore be important. Who obtained the judgment? When was it entered? Were you aware of the original lawsuit? How much does the creditor claim is currently owed?
Those questions can help determine what options should be considered after the account is frozen.
Can a Creditor Take Everything in My Bank Account?
Not necessarily.
The amount frozen by the bank and the amount a creditor may ultimately be entitled to receive are not always the same. Some funds are protected from garnishment under Florida or federal law, and those protections can become extremely important when a bank account is frozen.
Whether an exemption applies depends on the facts, including where the money came from, who owns the account, and whether the source of the funds can be established.
Do not assume that because the bank froze the money, the creditor automatically gets to keep it.
What Money May Be Protected From Bank Garnishment?
Several types of funds may be protected from garnishment depending on the circumstances.
Social Security benefits. Social Security benefits receive significant protection under federal law from most ordinary judgment creditors. Additional rules may apply to how certain federal benefits are handled when deposited directly into a bank account.
Wages and head of family protection. Florida law provides important protections for qualifying wages earned by a head of family. Whether the exemption applies depends on the individual’s circumstances and the source of the funds.
Retirement, pension, and disability benefits. Certain retirement accounts, pension benefits, and disability benefits may be protected under Florida or federal law depending on the type of benefit and the circumstances.
Workers’ compensation and unemployment benefits. These funds may also receive protection from ordinary creditors under applicable law.
Other exemptions may apply depending on the source and ownership of the money.
The important question is not simply how much money was in the account. It is what that money was and where it came from.
Why Bank Statements and the Source of the Money Matter
When claiming that money in a garnished account is exempt, documentation can be critical.
Bank statements, deposit records, benefit statements, pay records, and other documents may help establish the source of funds in the account. This becomes particularly important when an account contains money from several different sources.
For example, an account might contain wages, Social Security deposits, transfers from another account, and other deposits. Determining whether particular funds are protected can require reviewing the history of the account and tracing the money back to its source.
That is why one of the first things to do after discovering a bank garnishment is preserve your bank records and identify where the money in the account came from.
What About Joint Bank Accounts?
A joint bank account can make a garnishment more complicated.
The fact that another person’s name appears on the account does not automatically mean that all of the money is protected. At the same time, a creditor with a judgment against one account holder may not necessarily be entitled to money belonging to someone else.
The ownership of the funds, how the account is titled, who deposited the money, and the relationship between the account holders can all matter.
Married couples may also have additional protections under Florida law. In some circumstances, property owned by spouses as tenants by the entireties may be protected from a creditor of only one spouse.
Whether a particular bank account qualifies for that protection is highly fact-specific. A joint account should be reviewed rather than assuming that adding a spouse—or anyone else—to an account automatically protects the money.
What Should You Do If Your Bank Account Has Been Frozen?
Act quickly. Garnishment proceedings involve deadlines, and waiting can make it harder to protect funds that may otherwise be exempt.
Start by gathering the documents connected to the garnishment, including the writ, notices you received, and information about the underlying judgment.
Then gather recent bank statements and records showing the source of the money in the account. If deposits came from Social Security, wages, retirement benefits, disability benefits, or another potentially protected source, preserve the documents that establish where those funds came from.
You should also determine:
- Who obtained the judgment?
- When was the judgment entered?
- How much does the creditor claim is owed?
- Where did the frozen money come from?
- Who owns the account and the funds in it?
Most importantly, do not assume the money is already gone simply because the account has been frozen.
Can the Underlying Judgment Be Challenged?
Sometimes the garnishment is only part of the problem.
Because a bank garnishment generally results from an existing judgment, it can also be important to review the lawsuit that produced that judgment.
Depending on the circumstances, there may be questions involving service of the original lawsuit, a default judgment, whether the judgment has been paid or satisfied, or other issues affecting the underlying case.
That does not mean every old judgment can be reopened or every default can be vacated. But when someone first learns about a lawsuit because their bank account suddenly gets frozen, the history of the underlying case deserves a look.
Can a Bank Garnishment Be Settled?
Yes. Resolving the underlying judgment through settlement may be another option.
A judgment creditor may be willing to negotiate a lump-sum settlement, payment arrangement, or other resolution depending on the circumstances. Whether settlement makes sense depends on the amount of the judgment, the funds that have been garnished, any exemptions or defenses that may apply, and your overall financial situation.
The existence of a garnishment can also affect settlement negotiations. Before agreeing to anything, it is important to understand whether the frozen funds may be protected and what other options are available.
Shmucher Law has handled thousands of debt settlements involving creditors, debt buyers, collection companies, and creditor law firms. That experience can help determine whether a proposed settlement makes sense compared with defending the garnishment or pursuing another solution.
When Garnishment Is Part of a Larger Debt Problem
Sometimes a bank garnishment involves one old judgment and one creditor. Other times, the frozen account is the latest problem in a much larger financial situation involving multiple lawsuits, judgments, credit cards, collection accounts, or other debts.
When several creditors are involved, resolving one garnishment may not solve the underlying problem.
Bankruptcy may be one option to consider in that situation. Filing a bankruptcy case generally creates an automatic stay that stops many collection activities, including many garnishment proceedings. Whether bankruptcy is appropriate depends on your income, assets, debts, and overall circumstances.
The goal is not simply to get through today’s garnishment. It is to determine the best strategy for the financial problem as a whole.
Talk to a Florida Bank Garnishment Lawyer
If your bank account has been frozen because of a judgment, do not assume the money is already lost.
There may be exemptions protecting some or all of the funds, issues involving ownership of the account, questions about the underlying judgment, or opportunities to resolve the debt through settlement.
Shmucher Law represents Florida consumers facing bank garnishments, judgments, debt collection lawsuits, and other serious debt problems. We can review the garnishment, the source of the frozen funds, and the underlying judgment to help determine what options may be available.
Contact Shmucher Law today to discuss your bank garnishment and what you can do next.