What happens if they try to garnish my bank account?

I’ve got about $7,000 in credit card debt split across two Citibank cards. Both were charged off recently. Nobody has bought the debt yet, and no one’s trying to collect right now. I’m disabled, can’t work, and currently getting $350 a month from the state, which is judgment-proof.

Here’s the thing… sometimes friends or family give me cash. If I put that cash in my bank account and they try to garnish it, can they take it? And if they sue and get a judgment, can they look at past bank records to see where that money came from? Or do I just need to show that the money in my account at the time was exempt?

Basically, should I keep all non-exempt cash out of the bank until the six-year statute of limitations passes? Or should I only worry about this if the debt gets sold and they make a move to sue or garnish?

Not a lawyer, but I can tell you that once they file a case, the statute of limitations pauses. If they get a judgment, it usually lasts around 10 years, but they can renew it. If they serve your bank with a levy, it only applies to what’s in the account at that moment, not what was there before. So if you only keep judgment-proof money in the bank, you should be okay. Just remember, garnishment and levies aren’t the only ways they can try to collect.

@Haim
So if I’m understanding right, I only need to worry about what’s in my account at the time they go after it? That’s a bit of a relief.

Payton said:
@Haim
So if I’m understanding right, I only need to worry about what’s in my account at the time they go after it? That’s a bit of a relief.

Exactly. Just make sure any money in your account is from exempt sources. They still have other ways to collect though, so be careful.

Some people avoid banks altogether. They cash their checks and use money orders for payments. You could do the same with any extra cash you get.

Kiran said:
Some people avoid banks altogether. They cash their checks and use money orders for payments. You could do the same with any extra cash you get.

Yeah, a lot of folks have been doing that for years. It’s simple and keeps things safe.

Kiran said:
Some people avoid banks altogether. They cash their checks and use money orders for payments. You could do the same with any extra cash you get.

True. My disability makes it tough to get out often, so avoiding banks might be tricky, but I’ll look into other options to keep money safe.

When they garnish, they notify your bank of the amount and take what’s available. You’ll know if you’ve got judgments against you. Use the cash your family gives you for essentials like food and bills, and keep only the exempt money in the bank.

Some states protect a certain amount of money, no matter where it came from. Look up your state’s rules. Also, try to get exempt funds directly deposited to make it easier for banks to identify.

Phoenix said:
Some states protect a certain amount of money, no matter where it came from. Look up your state’s rules. Also, try to get exempt funds directly deposited to make it easier for banks to identify.

My state money goes onto an EBT card (not for food, just cash). I move it to my bank to pay rent and bills. If they get a judgment, I can show my withdrawals line up with the EBT deposits.

@Payton
That makes sense, but if the bank can’t tell what’s exempt, they might freeze everything. You can challenge it and get exempt funds back, but it could take weeks. Something to think about.

Before garnishment happens, they need to get a judgment. That means filing a lawsuit, and you’ll get a chance to respond. The statute of limitations is how long they have to sue, and if you make it past that, you’re good. Judgments also expire after a while, but they can be renewed. If it looks like you might get sued, it’s safest to pull your money out of the bank and use cash for everything. You should check with legal aid in your area to confirm your options.

Going all cash might be your best bet. They can levy your account at any time and take whatever’s in there. You can get a Walmart cash card or something similar if you need to make payments without using a bank account. If you’re considering bankruptcy, they’ll only ask for three months of bank statements.

Judgments can last up to 10 years and be renewed. If you can wait out the statute of limitations, the debt might get sold to another collector, but that’s their problem. Just keep your money out of the bank and stick to cash.