Having a bank account judgment against you can be stressful. Creditors can legally find your accounts and get the money they are owed. Even though it’s scary, knowing how it works gives you the power to keep your money safe. This guide looks at common ways creditors look for accounts and what you can do to stop them.
Court Orders Allow Account Garnishment
Getting a court order or judgment is one of the main ways creditors do this. This gives permission to take money out of your bank account to pay off debts. Creditors must carefully follow the steps they need to take, such as telling you and letting protected funds be exempt. But if they have a court order, they can freeze and take accounts.
Checking Public Records and Financial Filings
Searching public records is another go-to technique. Property, tax, and court documents often show financial ties. Bankruptcy petitions and business licenses also provide clues. Creditors can request these through Freedom of Information Act requests. For business debts, Forms 10-K and other filings with the Securities and Exchange Commission list banking relationships.
Turning to Credit Reporting Databases
Major credit bureaus like Equifax and TransUnion compile extensive histories that may list your banks. Creditors can legally access for debt collection, but misusing data violates the Fair Credit Reporting Act. Stay vigilant and file complaints if your rights are breached.
Mining Information from Third Parties
Third-party sources offer information bonanzas too. Data brokers aggregate details from various channels about your finances. While powerful tools misusing them flouts privacy laws like Gramm-Leach-Bliley. Tread carefully when sharing personal data to avoid fueling creditors.
Analyzing Payment History and Traces
By studying your payment history, creditors follow the money trail They review checks, wire transfers, and anything else showing account numbers, routing numbers, or other details. Subpoenas to banks can uncover more transaction data While legal, comprehensively protecting payments is wise.
Using Legal Interrogatories to Reveal Accounts
Creditors can serve you interrogatories, which are questions they can ask you under oath to get financial information. If the court says it’s okay, you have to give full and honest answers about accounts. Declining can spur penalties. Search warrants and other forms of discovery are used together to get a full picture.
Hiring Private Investigators to Find Accounts
Private investigators are proficient at uncovering accounts through legal means. Their bag of tricks includes surveillance, interviews, document analysis, and anything else within appropriate boundaries. Their gumshoe methods can root out obscure accounts.
Checking Past Payments to Creditors
An obvious but easy source is payments you already made to the creditor. Past checks or drafts show your bank’s details. The creditor can study their own records of your previous transactions for insights too. Don’t overlook what’s already available.
Contacting Third Parties With Information
If creditors believe others like business partners or family possess useful information, they may legally contact them. Third parties could be subpoenaed for records or deposed. Financial institutions, employers, and advisors often have breadcrumbs.
Following Automatic Payments
By tracing recurring payments you set up, creditors follow the money trail. Looking at rent checks, utility bills, insurance premiums and anything on autopilot can reveal involved accounts. Covering these tracks makes sense.
Safeguarding your accounts from creditors takes diligence. But understanding their playbook allows you to act prudently. Work with professionals to enact protections, stay compliant on debts, and keep your finances secure. With preparation, you can mitigate risks and find solutions.
Ways Creditors Can Find Bank Accounts
Just because a creditor sues you and gets a judgment doesnt mean they know where your stuff is. They still have to find it to collect the debt, absent any payment from you. In my experience, there are two ways in which they can find out where you bank.
- Previous records of payments. Have you made any payments to a collection agency or a law firm? They may have made copies of the checks before depositing them. This means that they have the routing and account numbers for your account. Having experience working with creditors, I used to tell them to make photocopies of checks as they came in just in case you would need the information.
- You told them where the accounts were. You may have told the creditors about your accounts. If you did, you would know it and at least see the levy coming or know that you need to take action. How did you tell them? Because they sent you a document called an Information Subpoena requiring you to make full financial disclosure of assets, liabilities, and income sources. In essence, they forced you to tell them where your money was!
So What Do I Do?
If you havent made payments to this creditor, its collection agents, or lawyers in a long time, or you changed banks since you did, you are most likely safe for now as long as you didnt answer their information subpoena.
But this does not mean that you should do nothing. It is only a matter of time before they do something, even if its recording the judgment as a lien against your home (if you own it). They will do something; you will wake up one day to no money in the bank or an imminent wage garnishment, and by then, it may be too late. You need to take action now!
Its one thing to decide to make payment arrangements with the creditor; its another to pick up the phone and call (and sometimes even more challenging to do it successfully)! I have helped many people establish an affordable payment plan with lawyers for creditors due to my extensive experience as one of them myself!
If you are being sued for a debt over $10,000, live in New Jersey, know you need to make payment arrangements with a creditor and are ready to take action, just click this link to schedule a call with me to discuss your case!
Want more information on how creditors use the courts to collect debt? Then download my free book, The Biggest Secrets Your Creditors Dont Want You to Know. Knowledge is power.
But if this debt is not the only one, and you are wondering whether you need a solution to a bigger problem, then download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey to determine if bankruptcy might be the right solution. You could also just give me a call and come in to discuss it further!
You can also take the quiz to the right to determine if bankruptcy is the right solution.
How Do Creditors Find Your Bank Account?
FAQ
What happens when a creditor knows where you bank?
When a creditor knows your bank account information, it can send a copy of the court judgment and a writ of garnishment to the bank. The bank will then freeze the appropriate accounts. If you didn’t pay the debtor with cash or money orders the first time, they probably already knew where your bank account is.
How does a debt collector get access to your bank account?
A debt collector gains access to your bank account through a legal process called garnishment. If one of your debts goes unpaid, a creditor—or a debt collector that it hires—may obtain a court order to freeze your bank account and pull out money to cover the debt. The court order itself is known as a garnishment.
Can a creditor tell me if my bank account is frozen?
No. A creditor does not need to tell you if your bank account is frozen after securing a judgment against you for unpaid debt. However, a creditor must notify you when it files a lawsuit against you and when it has received a judgment against you.
Can a debt collector access my bank account without a court order?
Usually, a debt collector must obtain a court order before accessing your bank account. However, certain federal agencies, including the IRS, may be able to access your bank account without permission from a court. How Much Money Can a Debt Collector Take From Your Account?.
Do judgment creditors conduct a debtor examination?
Judgment creditors may conduct “debtor examinations” which judgment debtors must legally comply with. This is how most judgment creditors discover bank accounts and other assets owned by judgment debtors.
Can a debt collector take money from your bank account?
Once your wages are deposited into your bank account, they aren’t considered wages anymore. So, a debt collector might be able to get into your bank account and take your money, even if it’s money from your paycheck. Can a Debt Collector Take Money From Your Account Without Permission?.
How can creditors find your bank account?
Payment History: If they’ve sent you a check before, it will have the bank’s information on it. Or, if you’ve already paid the judgment creditor something, like a bill, they will be able to tell where the money came from.
Do creditors watch your bank account?
They can gain access to your bank account through a process called “garnishment,” but only after they’ve sued you and won a judgment.
How do I hide my bank account from creditors?
Opening a Bank Account That No Creditor Can Touch. There are four ways to open a bank account that no creditor can touch: (1) use an exempt bank account, (2) establish a bank account in a state that prohibits garnishments, (3) open an offshore bank account, or (4) maintain a wage or government benefits account.
How do I protect my bank account from a lawsuit?
- Use Business Entities. …
- Personal Insurance Ownership. …
- Utilizing Retirement Accounts For Asset Protection. …
- Homestead Exemptions. …
- Titling. …
- Annuities And Life Insurance. …
- Transfer Assets To Your Loved Ones.