Garnishment is a court process that lets a creditor collect money from a garnishee. A garnishee is a third party that has control of your money or pays you. For example, a garnishee could be a bank, employer, a tenant, or the State of Michigan. Read An Overview of Garnishment to learn more about garnishments.
Some assets and income can’t be garnished. They are exempt from garnishment. Your creditor cannot take those funds from your bank account to pay your debt. If none of your income is exempt, a creditor can take all the money in your bank account.
Read Garnishment Exemptions to learn what assets and income are exempt.
Keep Exempt Funds Separate
To protect your exempt funds, you can keep them separate from other, non-exempt funds. If you don’t keep them separate, your exempt funds are usually still exempt. If a creditor has a judgment against you, your exempt funds could be improperly garnished if you commingle exempt and non-exempt funds.
Objecting to a Garnishment
To recover exempt funds that were improperly garnished you can file an objection to the garnishment. Read Objecting to Garnishments to learn about filing an objection. This process can take a long time. The bank will freeze your account when it gets the writ of garnishment. This means you will not be able to get the money that could be garnished from your bank account. If you can’t prove that the funds taken were exempt, then you will not be able to get that money back.
The best way to protect your exempt funds is to keep them in a separate bank account. If your creditor wrongly garnishes a bank account containing only exempt funds, it will be easier to prove that the creditor should not have taken that money.
There is a new rule banks have to follow if you get federal benefits electronically deposited. To learn more read Electronically Deposited Exempt Federal Benefits.