Bank account garnishment can be avoided by paying off debt, negotiating a payment plan with creditors, not having a bank account, opening an account in another state or region, opening an offshore bank account, or declaring bankruptcy. Creditors usually resort to garnishment as a last option.
Bank account garnishment can occur when an individual owes a substantial amount of outstanding debt that they are unable to pay. This practice can cause significant inconvenience for the debtor. Fortunately, there are ways around it. Perhaps the clearest technique is to pay off the debt before the foreclosure occurs. If this is not possible, other methods of avoiding bank account garnishment include not having a bank account; open an account in another state or region, or abroad; and declare bankruptcy.
Bank account garnishment is usually one of the last things a creditor will do to collect on an outstanding debt. In fact, most creditors will only garnish wages and bank accounts if all other possible options have been exhausted. Therefore, one of the most obvious ways to avoid a bank account lien is to pay off outstanding debt. Sometimes even a phone call to creditors to work out a payment plan can stop a bank account garnishment, as well as stop harassing calls from creditors and debt collectors. Additionally, when debtors choose to pay off the debt, they can also escape expensive collection fees that are typically added to outstanding debt.
One of the best ways to avoid garnishments is to not have a bank account. If a debtor suspects that they will soon be repossessed, it is advisable to stop using a bank account. Those who receive checks by direct deposit should request paper checks. Money orders can also be used instead of checks to pay bills. While not using an account to hold funds can be a major inconvenience, it also makes it impossible for a debt collector to get their hands on the money they could collect if the account were seized.
Although you can’t completely stop a debt collector, opening an account in another state or region will slow down the garnishment process. Additionally, collectors will need to file a lawsuit in a court in the new state, which can be a lengthy process. If you go this route, it’s best to avoid using checks as they can be easily traced.
Opening an offshore bank account is another way to avoid bank account seizure. Creditors cannot touch money in an offshore bank account and opening an account is generally not difficult to do. Unlike having a local bank account, debtors will have to do most of their banking online and will not have access to bank branches. For most, this is a small price to pay to avoid being repossessed.
Bankruptcy will also generally stop the lien on the bank account. Although certain debts, such as student loans, usually cannot be discharged in bankruptcy, debts such as outstanding medical bills and credit card debt can be. If a person has a large amount of debt that he or she knows cannot be paid, bankruptcy may be a viable option to avoid garnishment and other collection methods.
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