Creditors have two aims: to lend you money and ensure that they collect it back, with the appropriate interest, of course. Anything less than that is unacceptable. If you default on your loan, you’ll have to face the repercussions, including late payment fees, a hike in your interest rate, debt collectors, and the worse: wage garnishment. But wait a minute. Have you ever thought of how creditors find your account to garnish it?
Creditors can find your account by reviewing photocopied checks used by you to make payments (if you made any), by compelling you to tell them via an informational subpoena, or by hiring a skip tracer to locate your bank.
It’s bizarre how creditors end up garnishing debtor’s wages or bank account even without the debtor providing them with the information they need, at least not directly. One moment the debtor is thinking of how to best manage the $2000 in his account, and the next, he gets a shocking message from his bank informing him of the garnishment placed on his account. Of course, he is aware of the impending garnishment, but he was probably waiting for the creditor to ask for the details. So how did the creditor find his bank account? Read on, and you’ll find out!
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How Does a Creditor Find Your Bank Account?
Wage or bank account garnishment isn’t an easy process. First, there are court and attorney fees which makes the process a little expensive. Also, the time spent thrashing out the case in court makes the whole process stressful. That is why most creditors, if not all, would embrace lawsuits if and only if you fail to comply after series of letters, calls, or even pleas.
A creditor will have to file and win a lawsuit to be able to garnish your bank account. Most times, creditors don’t have to ask you for your account details to locate your account.
Has your bank account been garnished recently, and were you surprised at how the creditor ended up locating your bank account?
The Most Common Methods Creditors Use to Find Your Bank Account:
Skip Tracers:
A creditor can hire a skip tracer to locate your bank. If you have changed your bank, or if the creditor needs certain information regarding your bank accounts, this individual can be of help. Skip tracers are people who specialize in tracking down debtors and debtor’s personal information for creditors or debt collection agencies.
Past Checks or Transactions:
One of the techniques they use is past transactions. These individuals can figure out your bank account if you write a check to them. For instance, you might have negotiated a payment plan, but then you lost your job, so you couldn’t make payments as promised.
If you made just one payment, the collector probably made a copy of the transaction and stored it for future purposes. Peradventure you used a bank card to make the transaction, the creditor should be able to determine the name of your bank from the transaction details. On the other hand, if you wrote a check, the creditor should have your routing number and your account number as well.
Lucky Guess:
Creditors will activate that creative brain of theirs if you’ve given them nothing to work with. After they have a judgment against you, they’ll send the garnishment orders to any bank of their choice (probably the most common bank in the area), hoping to get lucky. If they send the order to bank A and you don’t have an account there, bank A will return the garnishment order, telling the creditor that it is impossible to execute the order because you don’t have an account there.
On the other hand, if you have an account in bank A, the creditor hits pay dirt. The creditor will be smart about this move, so he’ll start with banks with branches close to your house or job. If you relocated, he will check with the post office for a forwarding address and try banks in your current area. He can also review voter registration records or your state’s Department of Motor Vehicle for a current address. Of course, the process can be quite stressful, but it is worth every bit of the stress.
Check Your Credit Application:
Another easy technique creditors use to locate your bank account is by looking at your credit application. The chances are that you submitted your account details as part of the requirement for the loan. Since creditors may not request your account details, they might only ask for the name of your bank. If you provide them with this information garnishing your bank account should be easy as they don’t need your account number to do so, the name of your bank is enough.
How to Avoid Bank Garnishment?
Over the years, I have helped a few clients who had issues with their respective creditors. There was a particular young lady who was being threatened by bank garnishment. In the end, I was able to help her prevent the garnishment by requesting that she bring her creditor to the negotiation table. It seems the creditor was vexed that she was ignoring his calls and letters. Finally, they both negotiated a payment plan, and the debt was settled quickly. So, I’ll advise you not to ignore your creditor as it makes them consider the bank garnishment option.
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How Can I Protect My Bank Account From a Creditor?
It is certain that after a creditor has exhausted all his options, he will come for you with brute force using all the best legal techniques possible. As you already know, one of those techniques is bank account garnishment. So, if you have been threatened by a creditor and want to protect your bank, how do you do it? Is it possible to protect your bank from creditors?
The best way to protect your bank account from the creditor is by fighting the judgment or garnishment. By law, it is possible to declare certain types of income within your bank account exempt from garnishment.
Remember, don’t ignore your creditor so he doesn’t get upset and file a lawsuit. Do the needful by either negotiating with him or paying what you owe.
