How Do I Avoid a Bank Account Garnishment?

M. Chambers

Bank account garnishment can occur when an individual owes a substantial amount of outstanding debt that he or she fails to pay back. This practice can cause significant inconvenience for the debtor. Luckily, there are ways to avoid it. Perhaps the most clear cut technique is to pay off the debt before garnishment occurs. If this is not possible, other methods to avoid a bank account garnishment include not having a bank account; opening an account in another state or region, or offshore; and filing for bankruptcy.

Usually, a bank account garnishment is a last resort for creditors.
Usually, a bank account garnishment is a last resort for creditors.

Usually, bank account garnishment is one of the last things a creditor will do to collect an outstanding debt. In fact, most creditors will only garnish wages and bank accounts if all other possible options have been exhausted. One of the most obvious ways to avoid a bank account levy, therefore, is to pay off the outstanding debt. Sometimes, even a phone call to the creditors to work out a payment plan can stop a bank account garnishment, as well as put an end to harassing calls from creditors and debt collectors. In addition, when debtors opt to pay the debt they can also escape costly collection fees that are usually tacked on to the outstanding debt.

Garnishment occurs after a legal judgment against a debtor ensues.
Garnishment occurs after a legal judgment against a debtor ensues.

One of the next best ways to avoid garnishment is to not have a bank account. If a debtor suspects that he or she will soon be garnished, it is wise to stop using a bank account. Those receiving checks via direct deposit should request paper checks instead. Money orders can also be used in place of checks to pay bills. Although not using an account to hold funds can be a great inconvenience, it also makes it impossible for a debt collector to get his hands on money that he would be able to collect if the account were garnished.

Although it may not stop a debt collector completely, opening an account in another state or region will slow the garnishment process down. In addition, the collectors will need to file with a court in the new state, which can be a lengthy process. If taking this route, it is best to avoid the use of checks as they can be easily tracked.

Opening an offshore bank account is another way to avoid bank account garnishment. Creditors cannot touch money in an offshore bank account and opening one is usually not difficult to do. Unlike having a local bank account, debtors will have to do most of their banking online and won't have access to bank branches. For most, this is a small price to pay to avoid being garnished.

Bankruptcy will usually stop a bank account levy, as well. Although certain debts, like student loans, normally cannot be discharged in bankruptcy, debts such as outstanding medical bills and credit card debts can be. If a person has a large amount of debt that he or she knows cannot be paid back, bankruptcy may be a viable option to avoid garnishment and other collection methods.

Couples in a financial crisis may seek out the advice from a debt lawyer to avoid bank account garnishment.
Couples in a financial crisis may seek out the advice from a debt lawyer to avoid bank account garnishment.

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Discussion Comments


@literally45-- Can you just withdraw that money? And have you spoken to the lender about this?

I think sometimes people get into trouble because they just ignore their loans and pretend that they're not there. But speaking to the lender and explaining your situation may resolve the problem. They may make a deal for a lesser amount or set up a more reasonable payment plan.

I realize that not all lenders are understanding or helpful, but if it has come to this stage, there isn't much that can be done. Either let them garnish the account or make a deal with them.


I'm facing this issue and I don't know what to do. I don't have much money in the bank but it's all have. I certainly don't want it to be taken away from me for loans I couldn't repay due to health problems.


I have a huge amount of student loans for which I can't afford the monthly payments. So I've read about this topic a little bit. And I think that the best way to avoid consequences such as bank account garnishment or salary garnishment is to avoid defaulting on loans.

Different lenders have different policies on defaulting. Some may put an account in default if payments have not been made for two or three months. Once it goes into default, then the lender tries various things to get the money. It usually starts off with phone calls and requests. If these don't work, then the lender may file a case against the debtor or may hire a collection agency.

Collection agencies are nasty and no one should have to deal with them. They can harass and threaten people if they don't get the money. If nothing works, then they will file a case against the individual and the court may decide on bank account or income garnishment so that the lender can get his money.

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