Can a bank "garnish" my checking account without a court order?

Question

With all due respect, please only answer if you KNOW the answer, and I'd like you to cite your source. Please don't guess or give an answer authoritatively when you really don't know.

Can a bank "attach" or "garnish" my company's checking account without a court order if the company owes the bank money? It seems to me that if a court ordered garnishment is required for anyone else to get money out of my bank account without my consent, the bank would be subject to the same laws.

This is a CORPORATE bank account, not a personal one. And, if it matters by state, this occurred in Missouri.

Answer 1

If your company owes that bank money then yes, they can. The reason anyone else would have to get a court order is because your bank wouldn't be able to authorize money coming out of your account without you writing a check or taking money out. Are they garnishing because you owe on a loan? Often times if you take a loan out with a bank who you have a checking or savings account with, when you sign you actually agree to allow them to garnish from your checking account if your payments become past due. By signing that you'd allow this, it gives you a lower interest rate on your loan, but puts you at risk if you don't start paying back.

Answer 2

Garnishment of Bank Accounts

Bank accounts can be garnished and, when they are, it is almost always a surprise to the debtor. What typically happens is collectors obtain money judgments (usually by default) and then use the judgment to freeze the funds in your bank account. State law and banking rules govern how the bank must handle the garnishment process.

Collectors always notify the bank first and then notify the debtor. This way your funds are frozen before you can take any action such as withdrawing all your funds. Notifying the bank first is perfectly legal. You typically receive the notice (including your rights) a day or two after your funds have been frozen.

In most states, the garnishment can only freeze funds already in your account at the time of service on the financial institution. During the time the garnishment is in effect, the financial institution cannot honor checks or other orders for the payment of money drawn against your account. This means any outstanding checks will more than likely bounce or be returned for NSF. The exception to this rule is if your account has more on deposit than the amount of the garnishment. In this case, the bank can honor checks up to the amount that will reduce your funds below the amount of the garnishment. When the amount being garnished is paid, the freeze on your account must be terminated.


Doesn't say anything about WITHOUT a court order.

Answer 3

Most likely, yes. It's probably stated somewhere in the papers you signed when you opened the account. You should refer to those. After all, they don't need a court order to take money for an NSF fee.

Answer 4

It is in the fine print of the account agreement. The bank always has a lien on your deposited assets when you owe them money.

Answer 5

Yes.