Bank Account Garnishment and the Automatic Stay
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Bank Account Garnishment

The garnishment of funds from an individual's bank account can be one of the most unsettling consequences of debt. A surprisingly common tactic, this ploy is frequently used by aggressive creditors desperate to get their hands on your cash.

To the chagrin of many indebted consumers, bank account garnishment can be a& legal option for creditors, although most creditors must secure a court order before accessing your bank account. In order to stop creditors from garnishing their money, many people have filed for personal bankruptcy.

Bankruptcy's automatic stay puts an instant halt to most forms of collection, including bank account garnishment.

To learn if bankruptcy is an option for you and if it could help stop creditors from accessing your savings, get a free case evaluation with a local bankruptcy attorney. Simply complete the form on this page and we'll connect you right away.

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Stopping Garnishment Through Bankruptcy

One powerful method to stop bank account garnishment is through personal bankruptcy. When you file for personal bankruptcy, the court typically issues an automatic stay against your creditors. This automatic stay serves as a temporary restraint against the efforts of your creditors to collect overdue payments.

Both Chapter 7 and Chapter 13 bankruptcy offer the benefit of the automatic stay. Moreover, under Chapter 13, the automatic stay may put a hold on your bank account garnishment for several years.

The automatic stay is also designed to stop:

  • Wage garnishment
  • Foreclosure
  • Repossession
  • Lawsuits
  • Harassing phone calls and letters

In addition to the automatic stay, other potential benefits of bankruptcy may include:

  • The discharge of some or all of your unsecured debts.
  • An opportunity to rebuild your personal credit.

So, in addition to delivering a fatal blow to aggressive creditor, bankruptcy may also set you on a new course towards financial independence.

Funds Exempt From Garnishment

Even if a creditor or debt collector gets a court order allowing it to remove funds from your bank account, there are several funds that remain exempt from bank account garnishment.

These types of exempt funds vary from state to state, but often include:

  • Most types of government benefits, including Social Security, disability, unemployment insurance, public assistance, and veteran's assistance.
  • A set percentage of your income, which is typically governed by state law.
  • Worker's compensation payments.
  • Retirement benefits like annuity or pension payments.

The procedures required to stop creditors from taking these types of funds for vary from state to state.

To learn more about your state's bank account garnishment laws, whether you are eligible for bankruptcy, and how to stop aggressive creditors, contact a local bankruptcy lawyer today!

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