In an article published by Daily Business Review on March 30, 2022, Bradley Muhs outlined the responsibilities of a debtor’s bank requirements when a post-judgment writ of garnishment is leveraged by creditors to collect on their judgment.
“As soon as a bank is served with a writ of garnishment, a window opens,” Muhs said. “The importance of knowing what comes next cannot be overstated.”
Upon receiving the writ of garnishment, the bank’s first step should be to conduct an “account review” of any account maintained in the judgment debtor’s name, which should occur within two business days of receipt. This review is to identify any federal benefit payments received by the debtor to then be calculated into a “protected amount,” which is the combined value of those benefit payments made over an approximately two-month period. If that amount is greater than what is in the judgment debtor’s account, then there are no funds available that are subject to writ, and if the protected amount is less than what is in the account, writ attaches only to the funds in the account over and above the protected amount.
In its reply to a writ of garnishment, the debtor’s bank should disclose:
- Any indebtedness from the bank to the judgment debtor;
- Any property of the judgment debtor in the possession or control of the bank;
- Whether the bank knows of any other person indebted to the judgment debtor, or who may have any of the property of the judgment debtor in his or her possession or control; and
- The names and addresses of the judgment debtor and any other persons having or appearing to have an ownership interest in the garnished property.
For the full article, please click here.
