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Bank Account Garnishment

Read this in: Español

Author: Jay Speer

Try to get free or low-cost legal help: 

  • Call 866-LEGLAID (866-534-5243) or visit virginialawhelp.org/get-legal-help to find a legal aid office in your area.

  • You can also use the NACA (National Association of Consumer Advocates) lawyer Directory to find a lawyer. Under “area of practice,” select “bankruptcy” from the drop-down menu. Be sure to ask in advance if there is a charge for the initial consultation.

This article is about bank account garnishment in Virginia. The rules are different in other states. If you live outside Virginia, you can find free legal help near you at LSC’s find-legal-aid tool.

Bank account garnishment is when a court orders your bank to freeze money in your account to pay a debt you owe. Unlike wage garnishment, which takes money from future paychecks over time, bank account garnishment hits fast and takes everything.

Here is what happens the moment your bank receives the court order:

  1. Your bank freezes your entire account immediately. All the money in your account is swept up and held by the court.
  2. The account stays "clamped." Any new money that arrives after that — a paycheck, a tax refund, even a small deposit from a family member — is swept up right away too.
  3. This continues until the return date listed on your garnishment notice. That is when the court decides where the money goes.

You won't be able to withdraw money, write checks, or use your debit card. You might not even know it happened until you try to use your account.

On the return date:

  • If you have not filed an exemption claim before the return date, the court will give the money to the creditor.
  • If you do file before the return date, the court will review your claim and may release all or some of the money to you, schedule a hearing, or decide in the creditor's favor.

You should receive a notice about the garnishment by mail or posted to your door. It will be on colored paper and include an exemption claim form. If you didn't receive anything, read more about how to find out what your garnishment is for.

What if my income is protected? 

Some income is exempt from garnishment. This includes:

  • Social Security benefits
  • SSI (Supplemental Security Income)
  • Veterans benefits
  • And more

Read more: Income Protected from Garnishment (Exemptions)

Even if your income is exempt, money in your bank account can still be frozen. This is because when exempt money goes into your account, it mixes with other money. The bank doesn't know which money came from protected sources.

The only exemption is a bank account containing directly deposited Social Security benefits. Read the “What if my bank account only has Social Security deposits?” section below.

How do I get exempt money in my bank account released?

Act fast. The deadline is the return date on your garnishment notice. Try to file your exemption claim by the close of business the day before the return date. In some courthouses, clerks begin processing payments to creditors earlier in the day, before all claims have been reviewed. If you wait until the morning of the return date, you may miss your window. Once the money goes to the creditor, you cannot get it back.

Here are the steps:

  1. Go to court and file an exemption claim form (DC-454) right away.

  2. Bring bank statements showing your deposits.

  3. Bring proof that the money came from exempt income. Good examples are Social Security statements and benefit letters.

What if I have a joint account? 

If you share a bank account with someone else, all the money in that account can be frozen. This is true even if the other person doesn't owe the debt. Both people on the account should receive notice, and both have rights.

For married couples

The law usually treats joint account money as 50-50. Half belongs to each spouse.

For unmarried joint account holders

You can argue that part of the money belongs to the other person. You have to prove how much each person put into the account.

For example: A mother and adult son share an account. The son owes child support. The mother's Social Security gets deposited in this account. The mother can file papers claiming her portion of the account based on her deposits.

To protect the other person's money

  1. File an exemption claim immediately
  2. Bring bank statements showing who deposited what money
  3. Prove which deposits belong to the non-debtor

Talk to a lawyer because this can be complicated. See the “where can I get free legal help?” section below.

What if my bank account only has Social Security deposits? 

If your bank account only contains Social Security deposited by direct deposit, the bank is supposed to identify that and leave you access to two months' worth of benefits. If you have no more than two months' worth of Social Security in the account, you may not need to do anything at all.

If you have more than two months' worth of Social Security in your account, you may need to file an exemption claim form to protect the rest. Also, if the bank fails to protect the first two months' worth for any reason, you can ask the judge to correct that by filing an exemption claim.

Bring proof that all the money came from Social Security or other exempt sources. Bank statements showing direct deposits from Social Security are good proof. Bring several months of statements if you have them.

The court should release the money if you prove it all came from exempt sources.

Should I close my bank account? 

It depends on when you close it:

  • If you close it before the garnishment starts: There will be no money for the creditor to take. But make sure you have another way to access your money.
  • If you close it after the garnishment starts: The money is already frozen. Closing the account won't help. The frozen money stays frozen.

Important warning about Social Security: Never close your account if you receive Social Security or other benefits by direct deposit until you set up a new account first and make sure the Social Security is being deposited into the new account.

 

If your Social Security payment tries to go to a closed account, it bounces back. It can take months or even years to fix this. You won't get your benefits during that time.

 

Always open a new account and switch your direct deposit, and ensure the benefits are actually being deposited into the new account, before closing the old account.

Can I open a new account? 

Yes. If your income is low or fully exempt, you can: 

  • Open a new bank account at a different bank
  • Switch your direct deposit to the new account
  • Use only the new account for future deposits

This protects exempt income, like:

  • Your wages are under the garnishment limit, OR
  • Exempt income (like Social Security)

Important:

  • Before you close your old account, make sure your social security is being deposited into your new account.
  • Make sure your income is protected before doing this. If your income is not exempt, the creditor might be able to garnish the new account too.
  • If you owe a debt to the bank that holds your account, the bank might take the money out of your account. This is known as an offset, and you should consider opening an account with a different account.

Where can I get free legal help?