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Can a Bank Garnishment be Reversed?

Updated on
March 16, 2024

What is a Bank Garnishment?

A bank garnishment allows a creditor to legally seize funds from a debtor's bank account to collect on an unpaid debt. It is issued when a creditor sues a debtor in court for nonpayment and wins a monetary judgment.

Once the creditor has a judgment, they can request a one-time or continuing garnishment order from the court. This legal order is served to the bank, instructing them to freeze the account and release funds to the creditor.

With a bank garnishment order, creditors can seize up to 25% of the available balance in the debtor's bank account. The specific percentage allowed depends on state laws. Some states also protect a certain amount of funds in bank accounts from being garnished.

The bank is legally required to comply with the garnishment order and will continue releasing funds until the debt is satisfied or action is taken to halt the garnishment. Having a bank account garnished can be financially devastating, as the debtor loses access to the seized funds.

Who Can Garnish Your Bank Account?

A bank account garnishment order can only be obtained by certain parties that have the legal right to seize money from your accounts. The most common sources of bank garnishment orders are:

  • Creditors With Court Judgments: If a creditor sues you over an unpaid debt and wins a court judgment against you, they can then request a garnishment order to seize money from your bank accounts to satisfy the judgment. Common examples include credit card companies, medical providers, personal lenders, etc.
  • Government Tax Agencies: If you owe back taxes, the IRS at the federal level or state tax department can obtain a garnishment order to levy your bank account. They don't need to go to court first to obtain a tax lien or judgment. The IRS can also garnish Social Security benefits and wages.
  • Child Support Enforcement Agencies: If you are behind on child support payments, the state child support enforcement agency can request a bank levy to garnish account funds to fulfill support obligations. This is one of the few exceptions where government benefits like Social Security can be garnished.

So in summary, a creditor must have a court judgment, tax lien, or legal right to collect a debt owed before they can legally garnish your bank accounts. The exception is the IRS and state tax agencies, which have special powers to seize assets like bank accounts for back taxes owed without a judgment.

A bank teller helping with bank garnishment

Grounds for Reversing a Bank Garnishment

There are several legal grounds on which you may be able to get a bank garnishment reversed:

Improper Service of Judgment

If the creditor did not properly serve you notice of the lawsuit and default judgement, it may provide grounds for reversal. Proper service means you must have been personally served with official notice of the lawsuit and court proceedings. If you were not properly served, you can argue you did not have a chance to defend yourself in court, invalidating the judgment.

Exceeded Statute of Limitations

Each state sets legal limits on how long a creditor has to collect an unpaid debt through a lawsuit. This time limit is called the statute of limitations. If the creditor obtained a judgement against you after exceeding the statute of limitations for that type of debt in your state, you may be able to get the judgement reversed.

Judgment Obtained in Error

Sometimes creditors obtain default judgements against debtors in error. If you find the creditor made a substantive error in the lawsuit facts and evidence presented, you may be able to challenge the validity of judgement and get it vacated. For example, if you had proof you already paid the debt, or the creditor sued the wrong person.

Exemption for Protected Funds

Certain sources of income like Social Security, disability, veterans benefits, child support and alimony are protected from bank garnishment under federal and state law. If your bank account contains evidence of deposits from exempt sources of income, you can file a claim of exemption to prevent the creditor from garnishing specifically those protected funds.

How to Claim an Exemption

Certain types of funds are exempt from bank garnishment by federal or state law. This includes benefits like Social Security, SSI, SSDI, veterans benefits, public assistance, child support, and unemployment.

To claim a garnishment exemption for your exempt funds:

  • Identify what types of exempt funds are in your account, such as Social Security benefits or unemployment. Make sure you have proof that the funds are from exempt sources.
  • Get the proper exemption forms for your state or federal exemptions. For federal Social Security and disability benefits, use Form SSA-1011 to claim exemption.
  • Fill out the exemption forms stating that your account funds are fully or partially from exempt sources. Provide proof such as benefit payment statements.
  • File the exemption claim forms with the court, creditors, bank, and sheriff or any other enforcement agency. This notifies all parties that your funds are exempt.
  • If approved, the creditors should instruct the bank to release the exempt funds back to your account. No exempt funds can then be taken from your account to satisfy the garnishment.
  • The approval timeline varies by state, but can take 2-3 weeks once you submit the completed exemption forms. Follow up if your exemption is not processed promptly. Exemptions provide critical protection, so take action quickly if your exempt money is frozen.

Temporary Options to Avoid Garnishment

While you work on reversing the garnishment, there are some temporary options to prevent creditors from seizing additional funds from your bank accounts.

Freezing Your Accounts

In some states, you may be able to temporarily "freeze" your bank accounts to stop creditors from garnishing your funds. This prevents any withdrawals or deposits from being made to the account. To do this, you will need to submit a request in writing to your bank. Keep in mind that freezing your accounts will prevent you from accessing any money in those accounts. It is intended only as a very short-term solution.

Once you unfreeze your bank accounts, creditors can resume garnishing any funds if the underlying judgment is still in effect. So freezing provides only temporary protection.

Changing Banks

Closing your accounts at the bank where the garnishment order was served and opening new accounts at another bank will not permanently stop garnishments. This is because the court order allows the creditor to garnish funds in any bank account in your name.

If you switch banks, the creditor can serve the new bank with a garnishment order and continue seizing your funds. The only way to fully stop a garnishment is to satisfy the underlying judgment by settling the debt or successfully getting the judgment vacated or reversed.

The bottom line is that freezing your accounts and changing banks only provide temporary respite from garnishment. To permanently halt garnishment and regain control of your finances, you need to address the underlying judgment.

Settling the Debt to Stop Garnishment

If you are unable to fully reverse the bank garnishment order, another option is to negotiate a settlement of the underlying debt with the creditor. Settling debts for less than the full amount owed will satisfy the creditor and stop the garnishment process.

You can contact the creditor directly to discuss payment plan options. Many creditors are willing to work with debtors who show good faith in wanting to repay. They understand that receiving partial payment is better than seizing your accounts through garnishment proceedings.

When negotiating, don’t immediately agree to the first settlement offer. Creditors typically start higher and expect you to counter lower. Research typical settlement percentages for the type of debt you have. Debt settlement companies advertise up to 50% savings, but 25-40% is more realistic for most.

Calculate a reasonable monthly payment plan based on your budget. Avoid agreeing to payments you can’t consistently maintain. Defaulting on the negotiated payment plan could allow the creditor to reinstate collection efforts.

Get any agreement for a reduced settlement amount in writing before sending payment. The letter should state payment of the compromised amount settles the debt in full. This will legally prevent the creditor from pursuing you for the remaining balance later.

Understand that settling debts has credit score implications. Your credit report will show the debt as “settled for less than agreed amount.” This signals to other lenders that you did not fully repay. However, settling is still better than an ongoing garnishment which severely damages your credit.

If you need someone on your side to negotiate the best deal for you, contact us here at Cain & Daniels.

Filing For Bankruptcy

Bankruptcy will permanently halt all garnishment efforts on your bank accounts and other assets. But filing bankruptcy is a significant decision that comes with considerable drawbacks.

How Bankruptcy Protects Your Assets

When you file for bankruptcy, the court immediately issues an "automatic stay" that prohibits all collection activities against you, including wage garnishments and bank account levies. Creditors are forced to stop all garnishment attempts and return any money already taken from your accounts after you file.

Filing bankruptcy essentially wipes out most of your debts, with a few exceptions like student loans and child support. This eliminates the underlying judgments creditors previously used to obtain garnishment orders against you. Without those judgments, they have no grounds to garnish your wages or accounts.

Chapter 7 vs Chapter 13 Bankruptcy

You can file for Chapter 7 bankruptcy which completely discharges eligible debts, or Chapter 13 which creates a 3-5 year repayment plan. Both chapters stop garnishments.

Chapter 7 discharges unsecured debts like credit cards, medical bills, personal loans etc. You may have to liquidate some assets to pay creditors, but you keep exempt property like your home, car, retirement accounts etc.

Chapter 13 allows you to keep all property without liquidation. You get a consolidated repayment plan to pay back a portion of your debts over time. At the end, any remaining unsecured debt is discharged.

The Pros and Cons of Bankruptcy

While bankruptcy immediately halts garnishments, it severely damages your credit for 7-10 years making it difficult to qualify for loans, credit cards, mortgages etc. It also incurs legal fees and court costs. Any non-exempt assets could be liquidated.

Overall, bankruptcy offers the most definitive protection against garnishments by eliminating the underlying debt judgments. But it's a drastic move with long-term financial consequences to consider carefully. Weigh all your options before deciding if it's the right choice.

How Successful Is Reversing a Bank Garnishment?

The success of reversing a bank garnishment order depends on the specifics of your case and the reasons brought for overturning the order. However, there are some general statistics on success rates:

  • According to lawyers, around 25% of motions to reverse a bank levy are approved. So statistically, 1 out of 4 challenges succeeds.
  • Your chances improve significantly if you have a lawyer representing you and arguing your case. Pro se defendants (representing themselves) have a harder time navigating the legal system.
  • Strong exemptions like Social Security, disability, and veterans benefits have a high rate of success if properly documented. These funds are protected by federal law.
  • Cases where the original judgment was entered improperly or statutes of limitations have expired also have a good chance of reversal.
  • Weaker cases arguing procedural errors in serving notices or impropriety of freezing 100% of an account have lower success rates.

Overall, with a lawyer and legitimate grounds for reversal, your chances are much higher. Presenting clear evidence to support your arguments will give you the best possibility of succeeding. However, there are no guarantees, and you may need persistence through several attempts to get a favorable ruling. Tracking down all details of the original judgment and garnishment order will help strengthen your case.

A envelope of money from reversing bank garnishment

Getting Your Money Back

If you are successful in reversing a bank garnishment, whether through filing an exemption or vacating the judgement, you may be entitled to recover the funds that were already seized from your accounts. However, getting a refund is not always guaranteed.

The court has the power to order that any funds garnished be returned to you. But this does not happen automatically simply by reversing the garnishment order. You will likely need to file an additional motion with the court specifically requesting that the garnished funds be reimbursed.

Even if the court grants your request, the bank may not immediately refund the money. Banks tend to move slowly, so expect it to take at least 2-3 weeks after the court rules in your favor to regain access to your seized funds.

The bank will also likely subtract out any fees they incurred in processing the original garnishment before issuing a refund. These bank fees could further reduce the amount that is returned to you.

It depends on the individual situation, but you may not recover the full amount that was originally garnished from your account. Any funds you do recover could take a month or longer to be returned after successfully reversing the bank levy.

The best approach is to consult your lawyer and carefully read the court order to determine if and when you will be refunded any funds already garnished from your bank account. With patience and persistence, you can recover at least a portion of your seized funds.

Using a Lawyer to Reverse a Bank Garnishment

Hiring a lawyer can significantly increase your chances of successfully reversing a bank garnishment order. An experienced attorney has the legal knowledge to analyze your case and identify any mistakes or invalid judgments that could make the garnishment reversible.

Specifically, a lawyer can assist by:

Analyzing the Underlying Judgment

A lawyer will review the original judgment and garnishment order in detail to uncover any procedural errors, flaws in service, or other issues that could make the judgment void or voidable. For example, if you were not properly served notice of the lawsuit, that may invalidate the judgment.

Filing Motions and Paperwork

The lawyer can file motions and legal paperwork requesting the court vacate the judgment or quash the garnishment order. They will present legal arguments and case law showing why you are entitled to have the garnishment reversed.

Negotiating Debt Settlements

To stop the garnishment, an attorney may be able to negotiate with a debt collector. If they agree to settle for a lesser amount, the garnishment proceedings can be dismissed.


Lawyers typically charge an hourly rate, with fees ranging from $200-$500 per hour based on experience and location. Simple cases may cost a few thousand dollars, while extensive litigation could cost $10,000 or more. However, legal fees are often money well spent if the lawyer can successfully reverse an improper bank garnishment.

Be sure to understand the lawyer's fees and get a written representation agreement detailing the scope of services and costs. Reversing a bank levy requires legal expertise, so a lawyer experienced in garnishment defense is worth consulting. With the right legal help, you stand a good chance of halting wage garnishment and regaining control of your hard-earned money.

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