Few experiences in life match the gut-wrenching news that a creditor has completely cleaned out your bank account.  While you were already struggling financially, now you have been forced into survival mode.  The utility bills still need paid, and you still need to buy groceries.  What can be done to protect yourself and your family?  Read on, and I will explain how you still may be able to keep your money away from the collection agency.

Your first option is to try to stop the garnishment from proceeding.  To do this, first determine whether the money in your account is exempt because of its source.  Is the money from Social Security, Social Security Disability, Veterans Benefits or Disability, Unemployment or from an injury settlement?  If all of the money in the account is from just one of those sources, then you have an exemption for that money, and it can be protected if you move quickly.

When you were served with the garnishment summons, you should have been given a form with three “check the box” choices in order to file an objection to the garnishment with the court.  This objection must be filed within three (3) days of your receipt of the garnishment summons.  You need to check the box that says the funds are exempt from garnishment and file that paper with the clerk of the county court, requesting a hearing on the garnishment.

The other possible exemption is lack of actual ownership.  Perhaps this is your child’s wages from his or her job and you were simply listed as an owner of the account because your child is a minor.  If bank statements and pay stubs show that money in the account was not deposited in the account by the judgment debtor (you - the person owing the judgment) then it is exempt from garnishment.

In this situation, you should fill out the form requesting a hearing and explain that your child doesn’t owe the money on the judgment.  Then have your child sign that form and file it with the court.  This also should be done within three days of your receiving the garnishment summons.

When you go to court, you will need bank statements and pay stubs to offer the court as evidence to prove that the monies in the account are from an exempt source or that they belong to somebody else.  If it is your child’s money in the account, then you will need to explain this to the judge.

A legal proceeding like this is tricky – even for a lawyer.  You should strongly consider legal representation.  I have another free report available for you about how to be certain all of your money in the bank account is from one of the exempt sources.  Please let us know if you would like to receive that report, as well.

Another possible defense is that the money frozen by the collection agency, with its bank garnishment, may be exempt based upon the value of all of your property.  This is a complex objection to make, as you need to request a hearing and claim your exemptions for all of your property, including the money in the bank.  I recommend you obtain an attorney’s advice and help before trying to prove that all of your property is exempt.

If the money in the bank account has already been delivered to the collection agency/creditor, you are probably too late to save that money.  However, you can still take steps to protect your money in the future.  Once you file a bankruptcy, the creditor cannot continue to garnish your accounts.  When a bankruptcy is filed, you may even be able to obtain a refund of some of the money garnished from you!

In the mean time, you should change your finances to a “cash basis”.  This means that you do not have your paycheck electronically deposited into a bank account but receive a paper check, cash the check, and pay your bills with cash and/or money orders.

If that is not an option, because your employer requires electronic wage deposits, you should sign up for a prepaid debit card from Wal-Mart, H&R Block, or perhaps NetSpend.  This debit card must be a “prepaid” debit card.  It cannot be tied to a traditional checking or savings account.  While you may pay a monthly fee for this convenience, at least the collection agency likely will not be able to attach and garnish that prepaid debit card.

These are only temporary ways to protect yourself and your money.  Really, just first aid for a serious problem that will require help from a professional.  If you have recently received the dreadful news that a creditor is trying to garnish your bank account, please do not hesitate to contact the lawyers at the Steffens Law Office at 308-872-8327.  We have over 30 years combined experience in the field of debtor/creditor law, and we can help protect you from bank garnishments.

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