If a creditor is successful in suing a debtor and obtains a judgment against the debtor, the creditor has options to collect the money owed to them on the judgment.  Two common methods of collection are wage garnishment and bank account restraints.

Wage garnishment occurs when an employer is required to withhold the earnings of an employee for the payment of a debt according to a court order or other legal or equitable procedure.  Title III prohibits an employer from firing an employee because his or her earnings have been subject to garnishment for any one debt, regardless of how many levies are made or how many proceedings are brought to collect it. However, Title III does not protect an employee from discharge if the employee’s earnings have been subject to garnishment for a second or subsequent debt.

In a wage garnishment, a sheriff or marshall will serve the debtor with a document called an Income Execution. After the debtor is served, the debtor will have twenty days to begin voluntarily paying of 10% of the debtor’s gross salary. Debtors rarely make the voluntary payments. In most situations, the voluntary payments are not made, and the sheriff or marshall then serves the debtor’s employer with the Income Execution. The employer will then begin withholding 10% of the debtor’s gross salary.

Judgment creditors will also attempt to place restraints on the debtor’s banks.  Creditors will often serve an Information Subpoena and Restraining Notice on all of the banks in the debtor’s area.  The creditors hope to find an account with the debtor’s name on it that they can place restrictions on.

If the creditor locates a bank account with the debtor’s name, the account will immediately be frozen, or restrained, which will prevent the debtor’s ability to access the account.  Any checks that may have been issued before the freeze will bounce.

However, a New York law enacted in 2009, now prevents banks from allowing a restraint on bank accounts with under $1,740.00, or $2,500.00 if there are exempt funds.  Exempt funds include Social Security and pension.

A bankruptcy attorney can help a debtor remove any illegal restrains on bank accounts.