Wage Garnishment and Bank Account Restraints

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.

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

Table of Contents

Contact Us

Featured Blog Posts

What is IRS? IRS Tax and Audit Guide: Role of Internal Revenue Service in Enforcing Federal Tax Laws. Contact the IRS for Federal Tax Return, Form W-9 and More.

Introduction to What is IRS (Internal Revenue Service) The Internal Revenue Service (IRS) is a critical agency within the United States responsible for administering and enforcing the federal tax laws for the United States government. It plays a pivotal role in funding essential public services and supporting the nation’s economic

Read More »

Where is my New York State tax refund?

Introduction When tax season comes to a close, many New Yorkers eagerly anticipate receiving their state tax refunds. It’s a well-deserved reward for diligent taxpayers, providing a financial boost that can be used for various purposes. In this article, we will explore the ins and outs of the New York

Read More »

Miami Florida Tax Articles

Florida Tax Guide: Is Social Security Taxed in Florida? Federal Tax Benefits of Retiring in the State of Florida 2023

Florida Tax Guide: Is Social Security Taxed in Florida? Federal Tax Benefits of Retiring in the State of Florida 2023

Social Security benefits serve as a vital source of income for many retirees. As individuals near their golden years, understanding the nuances of Social Security taxation becomes crucial. In this

September 11, 2023
Florida Tax Information for Taxpayers and Tax Professionals: Do I Need to File State Income Taxes in Florida? Role of Florida Department of Revenue

Florida Tax Information for Taxpayers and Tax Professionals: Do I Need to File State Income Taxes in Florida? Role of Florida Department of Revenue

Are you a resident of the Sunshine State wondering about your state tax obligations? Understanding whether you need to file state taxes in Florida is essential to ensure compliance with

August 28, 2023
Florida State Tax Rate 2023: Is There An Income Tax in Florida? Everything You Need To Know About Florida Tax. Florida Income Tax Calculator

Florida State Tax Rate 2023: Is There An Income Tax in Florida? Everything You Need To Know About Florida Tax. Florida Income Tax Calculator

In a world where state income taxes are the norm, Florida stands out as a haven for residents seeking a reprieve from this financial burden. The Sunshine State has gained

August 18, 2023

Have More Questions?

If you have not found the Tax & Accounting answers you are looking for, feel free to search here and browse our article catalog!