Can a debt collector garnish your bank account when there’s nothing in it?

2 minute read

I received a wage garnishment letter from a debt collector, and I’m curious: What happens if I don’t make any money and I don’t have direct deposit? I have a shop on Etsy that I opened this year, but I haven’t made any sales. Can they still garnish my bank account if there’s no money in it? Can they put a freeze on it? Or do they garnish cash deposits as well?

– Jasmine in New Jersey

Howard Dvorkin, CPA responds…

Yes, Jasmine, your debt collector can go to court and get a “writ of garnishment” even if your bank account is empty. Of course, they don’t know your bank account is empty until after they show that writ to your bank.

After that, it’s done.

Writ of garnishment vs wage garnishment

I asked my friend Eric Olsen about this. He’s an attorney who founded HELPS, which stands for Help Eliminate Legal Problems for Seniors and Disabled. He described your situation like this: “It’s a one-shot deal. If they serve that writ at 10 o’clock and there’s nothing in your account, it’s over. If you deposit $1,000 at 11 o’clock, they can’t get it.”

Of course, wage garnishment involves the courts and cash, so it’s never quite that simple. If the debt collector also garnishes your wages instead of just trying to seize your bank account, that can stay in effect for 60 days – more in some states and less in others.

Protection from wage garnishment

According to Olsen, at least $217.50 a week is protected from wage garnishment. It’s a complicated formula that says 75 percent of your disposable earnings is protected, or 30 times the federal minimum wage, whichever is the bigger amount. But the important thing to know is: Unless your Etsy store really takes off, even that money is protected.

Wage garnishment protections for Social Security

You didn’t say if you’re receiving Social Security, Jasmine. If you are, and if your monthly benefit is direct-deposited into your account, you’re protected there, too. Federal law not only says your Social Security can’t be touched, but it also adds to that. As Olsen explains, it’s another formula: The bank must review your transactions for the previous two months and tally the Social Security benefits you received – then protect double that amount.

So, imagine you received $1,657 a month (which is the average benefit as of January 2022). The bank must let you access $3,314 – even if that debt collector has court permission to seize your bank account.

“I’ve yet to talk to a bank manager who knows that law,” Olsen says. Here’s how you can learn more about what bank managers don’t know: Can Social Security Be Garnished for Credit Card Debt?

Protections depend on who and what you owe

So far, we’ve just been talking about a debt collector. Much of what I’ve said so far would be very different if you owed back taxes. The IRS can garnish even your Social Security. Ditto for federal student loans you’ve defaulted on and any court-ordered child support or alimony you owe.

If you don’t know these laws and even your bank doesn’t know some of these laws, where do you turn? That’s where Debt.com can help. We’ll connect you with certified counselors that can provide a free debt analysis, then they match you with the perfect solution to your financial problems. That’s how I met Eric Olsen. It’s how you can, too.

Find solutions to deal with debt collectors.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC