How to Stop Garnishment of Your Bank Account

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In Arizona, if you have a judgment against you, the creditor could try to garnish your bank account. In fact, that is often easier for the creditor to do than to garnish your wages.

When Can They Garnish Your Bank Account in Arizona?

In general, the creditor must have a judgment against you in court to garnish your bank account. (There are a few exceptions for certain government agencies). This means the creditor would have had to sue you and win the lawsuit to get that judgment.

Unfortunately, most of the time, this means the creditor got a default judgment against you because most people don’t respond to lawsuits. That is a big mistake discussed elsewhere on this website. You should not ignore lawsuits.

Once the judgment is obtained, it is a pretty simple process for the judgment creditor to garnish your bank account. But first, they have to figure out where you bank. They have many ways of finding out this information. Sometimes, you have already provided this information to them perhaps unwittingly in the past. But creditors are pretty crafty at figuring this out. I know of one creditor’s attorney who subpoenaed the utility company to find out what bank account the debtor was paying their utility bill with. If, for some reason, the creditor cannot figure out where you bank, they could always request a judgment debtor’s exam and ask you under oath where you bank.

Objecting to the Bank Account Garnishment

In any event, once they know where you bank, it’s simply a matter of filing some forms with the court and sending them to the bank. The bank is then obligated to freeze the funds until/unless you timely object. There are some pretty intricate rules pertaining to garnishment, but suffice it to say you can object to the garnishment if you have grounds for doing so.

One ground for objection might be if your bank account contains “exempt” funds. There is a statutory exemption on the first $300 that is in the account. Another example of exempt money is social security income. That type of income is typically exempt from garnishment/collection. But you must be able to prove that the funds in your account are actually from social security. So you must be prepared to object if necessary.

Settling the Debt to Stop Garnishment

Another option to stop bank account garnishment is to contact the creditor and negotiate a settlement. A binding settlement should stop the garnishment. But if you have a significant amount of money in the account about to be garnished, or especially if you have enough to satisfy the debt, then settlement could be difficult.

Motion to Set Aside Judgment

If you believe that the judgment against you is invalid, you may be able to file a motion to set aside the judgment. In certain circumstances, this motion could be combined with a motion to stay (hold off) the garnishment until the court can determine whether the judgment is valid. But this type of maneuver requires legal skill and you should consult an attorney if you believe you may have an invalid judgment issue.

Filing Bankruptcy to Stop Garnishment

The last option is bankruptcy. Filing bankruptcy will typically stop bank account garnishment. Of course you don’t want to file bankruptcy on a whim. But if you have other substantial debt and are a good candidate for bankruptcy anyway, then this could make a lot of sense. You should contact an attorney to be thoroughly evaluated for bankruptcy.

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