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Debt collectors can seize your stimulus money via bank garnishment!

Many people in this country are anxiously waiting for their badly needed stimulus money from the federal government to hit their bank accounts. Debt collectors are also waiting for the same thing! If there is an outstanding judgment issued against you, a judgment holder/creditor may file a bank garnishment to seize the funds in your bank account. At this time, there are no federal laws nor any Georgia laws protecting your federal stimulus money from debt collectors.

Federal law protects some funds from debt collector garnishments such as social security benefits, disability, benefits, and certain retirement benefits. However, this does not mean that a debt collector won’t file a bank garnishment to try to take the funds from the account.

Click here for a list of funds “exempt” from garnishment.

Debt collectors don’t just get a percentage of the money in the bank account they garnish – they get it all! (up to the amount of the judgment plus costs).

In Georgia, a bank account garnishment is considered a “one-shot” garnishment. This means that the debt collector gets one shot at the money in the bank account for each bank account garnishment it files. (But a debt collector could keep filing bank account garnishments). Under Georgia law, a bank account garnishment will seize the money that is in the bank account on the day the garnishment is served on the bank and any money that is deposited into that account until five days thereafter. During that five day period, any money already in your bank account will be frozen and so will any money you put into that bank account (i.e. direct deposits). Once that five day period is up, the bank sends all the money it collected from your bank account for that five day period to the court where the bank garnishment was filed. If the debt collector wants to seize more money from your account outside that five day period, they have to file a new garnishment case.

Bank garnishments are different from wage garnishments

In Georgia, a debt collector can use a bank account garnishment to take ALL the funds in your bank account up to the amount of the judgment plus costs. This is significantly different from a wage garnishment that is served on your employer because with a wage garnishment, the amount of money withheld from your paycheck is only a certain percentage of your pay (usually 25%). In addition, a wage garnishment lasts 180 days and the bank garnishment lasts only five days.

How will I know if a garnishment has been filed against me?

Whether its a wage garnishment or a bank account garnishment, you will likely find out that the garnishment has happened after you discover your bank account frozen or the funds are withheld from your check. In Georgia, generally, a debt collector does not have to warn you in advance that it is going to file a garnishment to collect on a judgment. However, debt collectors do have some responsibilities under Georgia law to send you notification of the garnishment within a certain period of days after the garnishment is served on the bank or the employer.

How can I protect my stimulus money from debt collectors?

If you receive a paper check from the government rather than the direct deposit, this gives you the option to simply cash the check rather than deposit the money into a bank account. If you are receiving a direct deposit of the money into your bank account, do not let it sit in their long! Just like you, the debt collector isn’t sure exactly when the direct deposit is going to occur. You should check your bank account every day and be aware of when the money is deposited. The longer it sits there in the bank account, the more vulnerable it is to a debt collector filing a garnishment action during the time in which you have all that money sitting there. Even if you transfer it to savings, it’s still vulnerable to garnishments. Many people rely on having bank accounts to pay their bills but you also have the option to transfer money onto prepaid cards, which you can use just like a regular debit or credit card to make online payments.

Jill Sandt

I am an attorney in Georgia focused on helping people fight debt-collection lawsuits.