Debt collection - how long after judgment before bank is garnished?

Submitted by dudeindebt1990 t3_z7fooh in personalfinance

My employer and my job is in a state where my wages can't be garnished, but I believe like all other states, a debt collector who gets a judgment can seize/garnish assets from my bank. From what I understand, this can result in a bank account freeze because the debt collector would sue my bank in order to start that process?
If so, how long usually after they get a judgement from a lawsuit does that take to happen? Is it within the same month? Or usually a few months out or longer?

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theoriginalharbinger t1_iy6e9d6 wrote

First, ignore what /u/Vanathor said. "Open a bank account in another country" is the kind of spectacularly bad advice that will cause all kinds of difficulties for you. Starting with fundamentals, like "You won't be able to buy anything online that ships to the US quickly" and "You'll eat gigantic sums in currency exchange going both directions" and "Other countries have laws, same as us, and generally require some kind of reason to open an account within their borders."

Second, name your state. Texas is not California is not Maryland. Different states permit creditors to do different things.

Third, your bank isn't subject to your lawsuit.

Fourth, the reason I haven't answered your question is because nobody can. Decisions as to when to sue a debtor and when to obtain a writ of garnishment are heavily dependent on the nature of the debt, the amount, where an individual is working, the state, and how much the collector has on his plate. I've gone from lawsuit to garnishment for some of my debtors in under 5 weeks; others I've waited months on.

Supply the details and an answer might be on offer.

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Vanathor t1_iy6hmy7 wrote

By his own admission, this man is a debt collector. Please don't take advice from someone in other circumstances would be the first to take his pound of flesh.

Assuming you are in a situation where significant assets are liable to get taken from you, it's a perfectly valid answer. Credit Suisse or UBS are pretty standard options. Offshore accounts: not just for the wealthy. Mind, again, this is assuming large enough sums that it is worth it (high five figures would be the minimum). Anything else and you're probably better off using cash and cashiers checks in the short term.

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theoriginalharbinger t1_iy6ij5e wrote

Ha, buddy. I'm a landlord, not a debt collector, and thus only sue people who owe me (a first party collector, in the lingo). And I have non US accounts. You are absolutely talking out of your nether regions with this advice.

And if OP followed your advice in a variety of states, he'd end up getting his employer in trouble, not to mention himself because you still have to have money residing in a US account before it gets transferred overseas. If he has high 5 figures of debt, then he will get nailed to the wall in any supplemental earing where he's hiding assets. If he has less than that, your advice boils down to "Make your life significantly less convenient and expensive to dodge debt collectors"

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Vanathor t1_iy6jmcz wrote

Per his post, he lives in a state where his wages are not directly subject to garnishment or collections. His employer wouldn't be subject to that as a party as a result. So long as it never touches a US account as a receiving party in the first place outside of his employer he is in the clear. Other consequences would exist - his credit score would take a hit, etc. Not giving up significant amounts of money often can be the better option.

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theoriginalharbinger t1_iy6k8ub wrote

You keep talking about things you don't know about.

If he has currency, it has to be entered into a US bank before it goes overseas. If he resides in a state with a creditors right to levy his account, it can be levied. If he lies about its existence, he can be held for contempt.

There's a reason wealthy people on the verge of bankruptcy don't just move to Texas and move their money overseas. It's because the motion you've described fundamentally puts on society's fringes, makes dealing with everything inconvenient, and can be construed as contempt of court or criminal behavior.

You literally do not know what you're talking about. Non US accounts require a non US nexus anyway. And considering you went bankrupt recently, I have my doubts that you've opened an overseas account or have any knowledge of the reporting requirements or overseas assets vis a vis debt collection.

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Vanathor t1_iy6kvfz wrote

The power of the government in a bankruptcy situation is pretty different from a private debt collector trying to execute a judgment. People run from their creditors all the time. You act like this is a novel situation. It's not.

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theoriginalharbinger t1_iy6lxyx wrote

Dude, just let it go. Advising people to open up bank accounts overseas when it's obvious you have no experience in the matter is a dumb move, and you have no reason to compound that error here.

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newbeginingshey t1_iy6mplx wrote

Most judgments are resolved with voluntary payment plans. I’d expect the law firm to contact you to see if you’re amenable to that first. It’s common, not an entitlement.

I wouldn’t do anything drastic to hide your bank balances. Plenty of other assets can be garnished or have a lien put on them. If you have the balance to pay, that will be less problematic than a lien on your home. A voluntary payment plan will be the least painful path forward as you can negotiate the monthly amount - anything they have to garnish will be taken all at once without warning.

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dudeindebt1990 OP t1_iy86hpo wrote

Yeah I have a lawyer who is representing me so I haven't been in contact with the plaintiff/creditor.
So they could take everything? There's no limit/percentage to how much they could tank from bank? This is in TX as well

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newbeginingshey t1_iy8f1ip wrote

I don’t know the TX specifics. Your lawyer could give you those, but having worked in this space myself, there is a % cap on wage garnishments, but not a cap on bank balances. Obviously a lien on any tangible property won’t be capped - it will just be the full remaining balance.

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dudeindebt1990 OP t1_iy8saxj wrote

That's awful. So they could literally make me get evicted by taking all my funds so I couldn't pay rent?

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newbeginingshey t1_iy8wx0k wrote

The situation you describe is why there’s a cap on wage garnishments (I don’t recall the exact amount but I think it’s close to 20%). They can’t take 100% of your paycheck. That could make you homeless, or inadvertently punish any kids you might have etc.

Bank balances though don’t have a cap. Nor does a lien and once there’s a lien on the home, a sale can be forced to collect, so yes you needing to move can be a downstream outcome.

Not to sound like a broken record but all of this is why a voluntary payment is better. Name the amount you can pay each month without becoming homeless.

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dudeindebt1990 OP t1_iy99w6l wrote

Yeah that's crazy. I guess it doesn't make sense to have a cap on wage garnishment if there's no cap on how much they can take from bank. Wages go into a bank as soon as their paid lol. It's silly that a state would not allow wage garnishment but would allow bank garnishment. I'd prefer to have a wage garnishment since there's a cap there, rather than all of my money be depleted.

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Vanathor t1_iy6cf7p wrote

Arrange to get a physical check/get off direct deposit. Then you can open a bank account based out of another country that doesn't have any US branches. Do your research so you don't get one that takes huge fees. That is frequently the easiest way to fight an account being garnished as those accounts are not subject to US jurisdiction. But DO tell the IRS about them when it comes time to file taxes so you don't get fucked there.

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