In today’s economy a good percentage of Americans are living with more debt they can handle. This is mainly due to financial decisions consumers have made in the past or because they no longer have as much income coming in as they did before. With the labor and mortgage market in such horrible condition it is no surprise why many are in fear their creditors will come after them for responsibilities they have failed to manage.
If you currently have a lot of overdue bills or outstanding debts it is possible for your bank account to be garnished by your creditors. However, for this to happen certain criteria needs to be met. For creditors to be able to garnish your bank account they must first win a court ordered judgment against you saying it is ok for them to garnish your account. Also, certain funds such as Social Security payments and other Federal payments cannot be garnished by your standard creditors. But the IRS may garnish your bank account and all Federal payments without a court order. This is why it is so important to pay any taxes that you might owe.
When you go too long without paying your bills you will find that your debts will go to collection agencies. These collection agencies have many different methods when it comes to getting you to pay your bills. One of these methods is garnishing your bank account. While it is possible for these agencies to do this they may not do so without a court ordered judgment against you stating that is ok for them to garnish your bank account. Also, these debt collectors may not take any money from your Social Security payments or any other Federal payments via this court ordered judgment.
However, if your bank account is about to be garnished for not paying your taxes the IRS has the right to garnish your account without a court ordered judgment and may also take money to pay your debts from Social Security payments and other Federal payments such as compensation for injury, civil service benefits, federal retirement benefits, Veterans benefits, etc. If you notice that your federal payments are being garnished it is important that you review any documents pertaining to your situation that explain why your bank account is being garnished and by whom. Doing this will clear up a lot of the confusion when you notice your bank accounts have been frozen.
If you are fearful of your bank account being garnished be aware that you will usually receive a letter from the bank letting you know that this event is about to take place. Banks will send this letter as a business best practice when they are about to hand over your funds in a seizure. Hopefully you will never be served with one of these letters from your bank, but if you are then it is vitally important at that point to try make any arrangements that you can to get your debts in good standing so that your accounts are not seized. Having your bank accounts garnished can be a huge headache and will most definitely lead to other financial troubles as well.
You may still have some time after receiving this letter to prevent your creditor from actually doing this. As soon as you get this letter in the mail it would be extremely wise of you to immediately call the collection company to negotiate some sort of repayment plan, settlement, or something else of that nature. But if you fail to communicate with the collector be prepared for your account to be garnished as planned.
Therefore, if you currently have massive amounts of past due bills and unpaid debts it is possible that your bank accounts may be garnished. For a debt collector to garnish your account they must win a court ordered judgment against you stating that is allowed for them to seize your accounts. However, if you owe back taxes then the IRS does not need this court order. If you are fearful of having your bank accounts garnished it is highly recommended that you try and get all of your debts in good standing before the debt collectors take control of your accounts.