When are creditors allowed to garnish your wages or funds in your bank account in Virginia?
A creditor can garnish your wages or funds in your bank account to collect on an unpaid debt after the court has entered a judgment against you. A judgment is an order entered by the court confirming that you owe a debt, the amount that is owed, and the interest rate that accrues until the debt is paid.
What will happen if a garnishment is sent to your job in Virginia?
When a garnishment is sent to your employer, your employer is required to deduct 25% of your disposable earnings from each paycheck that you receive and send those funds to the court that issued the garnishment. The court will then hold the funds in an escrow account until the return date of the garnishment. On the return date, all of the funds collected will be given to the creditor to satisfy the debt owed. In the event that there is still an unpaid portion of the debt at that time, the creditor can issue another garnishment to collect the remaining amount due.
What will happen if a garnishment is sent to your bank in Virginia?
When a garnishment is sent to your bank, your bank will freeze all of the funds in your bank account up to the amount that is owed on the debt being collected. Additionally, the bank will freeze all funds that are deposited into the account following the garnishment up to the amount owed on the debt being collected. The bank will send the garnished funds to the court, which will be held in an escrow account by the court until the return date of the garnishment. On the return date, the funds will be given to the creditor. If there is any unpaid portion of the debt at that time, the creditor can issue another garnishment to collect the remaining amount due.
How do you keep money from being garnished?
Filing a bankruptcy case under Chapter 7 or Chapter 13 will stop a garnishment in Virginia and sometimes even enable you to get back funds that have already been taken from you. Once a bankruptcy is filed, the automatic stay goes into effect, which stops all collection actions, including but not limited to garnishment. This means that your paycheck and bank account will be protected from future garnishment. Additionally, as long as the bankruptcy is filed before the return date of the garnishment, the funds can be returned to you and not given to the creditor. If you are faced with a garnishment or have concerns about a judgment that may turn into a garnishment, let us help you. Don’t wait too late.
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