What Is a Bank Account Garnishment?
Bank account garnishment, also known as a bank levy, is a technique which is used to recover money from people with substantial outstanding debts. Garnishment occurs after a legal judgment against the debtor occurs, and is done by issuing a bank with a court order which forces them to freeze a debtor’s account or accounts, and to withdraw enough funds to satisfy the legal judgment. If the debtor’s account does not contain enough money to satisfy the judgment, he or she will be liable for the remaining balance. Creditors usually use other means to recover funds first. Classically, creditors place a lien on a debtor’s property so that the property cannot be sold without satisfying the debt. Creditors can also use wage garnishment, in which a portion of an employee’s wages are withheld by court order each month until the debt is satisfied, to recover a debt. However, in the event that a debtor is unemployed, the creditor can turn to bank account garnishment.
