Yes, you can have your earnings garnished under Florida law. On the other hand, garnishment rights and the amount of money creditors can take from you depend on whether you qualify as a debtor “under Florida Statute 222.11, “head of the family” The head of a family is defined in Florida law as a person who is the primary breadwinner “a family member who provides more than half of a child’s financial support
This post explains what happens if you’re paying more than half of a child’s or other dependent’s support, the garnishment regulations in Florida if you aren’t the head of the family, what happens to money you’ve already placed in the bank, and how bankruptcy may help.
Can a creditor garnish my bank account in Florida?
Chapter 77 of the Florida Statutes allows for the seizure of funds in a person’s bank account in the state. Judgment debtors have the right to apply for a garnishment order under Section 77.03 of the Revised Code of Virginia. Garnishment is served on the bank by the creditor once it has been issued. Section 77.06 of Florida law mandates that the bank freeze all of the debtor’s accounts, whether they are joint or individual.
Banks aren’t the ones who get to decide whether or not a judgment debtor is free from garnishment. Instead, the duty of claiming any applicable exemptions falls on the judgment debtor under Florida’s bank account garnishment processes.
Exemptions and garnishment processes in the state of Florida allow debtors to safeguard their bank accounts from seizure by the state government. Financial benefits including social security, pensions, and annuities are immune from garnishment under Florida law. When an exempt asset is deposited in a debtor’s bank account, the money preserves its exemption status, according to Florida courts.
Garnishment is subject to procedural defenses as well. There are numerous procedural and timing deadlines imposed on creditors by Florida garnishment statutes. Garnishment laws are carefully adhered to by the authorities. In the event of a garnishment that deviates from the statute’s standards, the cash should be freed and the garnishment terminated.
For debtors who are garnished, the garnishment statutes outline how they might pursue a claim of exemption or other legal defenses. Garnishment can only be fought in court if you get a court order to release your money back. Until the garnishment is overturned in court, all of the debtor’s garnished funds remain frozen.
During the course of the debtor’s legal defense, the bank cannot be held liable for the money it holds in a garnished account. All money related to the debtor’s social security benefits must be released from garnishment right away if a garnished bank receives them.
Is my home protected from creditors?
All creditors except those who possess a mortgage or lien on your property are prohibited from seizing your home if you are the owner.
If you live in an incorporated region, you are protected against being compelled to sell your house and up to half an acre of property. If you live in an unincorporated region, your home and up to 160 acres are exempt from taxation.
In the event that you are unable to keep up with your mortgage payments, your lender may begin the process of foreclosing. As long as there are liens (tax liens, contractor liens) against the property, those creditors may also proceed with a foreclosure.
Is my personal property safe from creditors?
Creditors are not allowed to seize up to $1,000 of your personal property.
Personal property worth up to $4,000 is exempt if you don’t own a dwelling.
All of your possessions are yours to retain. A single creditor will likely not be able to seize the property that was pledged as collateral for a loan.
Even if you have money in a bank account, you may be excused from this rule.
Immediately notify the court, sheriff, and creditor if a creditor attempts to seize your personal property.
Use this Sample Exemption Claim as a guide.
If you earn less than $750 per week as the family’s breadwinner, your wages are immune from wage garnishment. Even if you earn more than $750 per week in take-home pay, you are still protected from garnishment if you have not agreed to have your salary used to settle the debt. If you live in Florida and provide more than half of the financial support for a kid or other dependant, you are a head of family.
Are my wages protected from creditors?
In the absence of a title such as “head of household,” you are still protected. If your weekly take-home salary is less than $217.50, you are not required to pay income tax. Until the judgment is paid in full, the creditor can only take the smaller of 25% of your net pay or the difference between your net wages and $217.50 each week from you.
Despite the fact that they may be mingled with funds from other sources, the salaries of a household’s primary breadwinner remain safe from creditors.
As soon as possible, file a Claim of Exemption the court, your employer, and the creditor to protect yourself from wage garnishment (see sample Claim of Exemption at the end of brochure).
Are Social Security and Other Benefits protected?
Social Security, workers compensation, unemployment benefits, disability benefits, VA benefits, and retirement benefits are all immune from garnishment. They are excluded even if they are held in a bank account.
Do not wait to file a Claim of Exemption when your bank account is garnished by a debt collector (see sample Notice of Exemption at the end of brochure).
Is my vehicle protected from creditors?
Your vehicle is exempt up to $1,000. This means that your vehicle cannot be removed to fulfill a judgment unless the worth of the car, less the amount of any loan on the car, is greater than $1,000. File a Claim of exemption with the court, sheriff and creditor (see Claim of Exemption at the end of this booklet) (see Claim of Exemption at the end of this brochure).
What about other property or income?
You and your dependents are not liable for the cost of any medical equipment prescribed by a physician.
The property of a married couple can be safeguarded if only one of them is being sued. Exemption claims must be filed with the courts, sheriffs, and creditors by anyone who is owed money (see Claim of Exemption at the end of this brochure).
What is the procedure for claiming the exemption?
Make a formal claim to the court stating why the money or property is exempt (see sample at end of brochure). If there is no attorney for the creditor, or if there is, send a copy to the person who is holding your money or property. You must respond to the creditor’s objections within three business days (or eight if you mail them). There will be a fast hearing scheduled if your creditor opposes your exemption. The court will cease the garnishment if the creditor does not object to your exemption.
How much can wages be garnished in Florida?
The amount of money that can be deducted from your paycheck is regulated by federal law. In theory, you should be able to cover your living costs. Due to the lack of state restrictions, federal law applies in Florida. Here are the guidelines:
As long as your disposable income exceeds 30 times the federal minimum wage, a creditor can garnish 25 percent of your disposable income or that amount, whichever is smaller. Your salary cannot be garnished if your disposable income is less than 30 times the federal minimum wage. Section 222.11 of the Florida Statutes
Your “disposable earnings” are those wages that are left over after your employer has taken the necessary deductions under the law. Federal, state, and municipal taxes, Social Security, and the employee’s share of state unemployment insurance are all examples of legally required deductions. Union dues, life and health insurance, and most retirement plan payments aren’t taken out of your disposable income since they aren’t mandated by law to do so.
You can be charged by your employer in Florida if you have to comply with a wage garnishment order.
Can a debt collector garnish your whole paycheck?
Creditors, on the other hand, can’t take all of your pay. The amount of your salary that can be garnished is subject to a variety of laws and legal restrictions. Federal law, for example, restricts the amount of money judgment creditors can take from a debtor. After statutory deductions, your disposable earnings for that week are restricted to 25 percent of your disposable earnings for that week or the amount by which your disposable earnings exceed 30 times the federal minimum wage, whichever is smaller. Some states limit the percentage of wages that can be garnished to a smaller percentage. State minimum wage and a separate multiplier are taken into consideration in California, which might reduce the amount of money withheld.
There will be a continual wage garnishment unless you pay off your creditor’s debts or file an exemption with a court to cease the garnishment. Income that you’ll be entitled to keep depends on your state’s exemption laws. As a result of your circumstances, you may be able to keep some or all of your money. Filing for bankruptcy may also be able to put a stop to most garnishments.
Open a Bank Account Solely for Government Benefits
People who receive monies that are not subject to wage garnishment might choose this option. This money cannot be accessed by creditors for a specified amount of time, which is usually two months.
To qualify as exempt, these monies must be put straight into your bank account. It is no longer exempt if you transfer the funds to another bank account or deposit them yourself, and you must establish that the monies come from exempt sources.
The bank must keep these exempt money available to you notwithstanding a bank levy, but you don’t want to risk having a debt collector take your Social Security payments or your bank freezing child support. A separate bank account should be set up for direct deposit exempt funds in order to avoid similar blunders.
Open a Bank Account in a State with 100% Wage Garnishment Protection and Favorable Bank Levy Laws.
Bank levies allow a judgment creditor to demand that your bank freeze your account and remove all of your funds, unless you have any funds exempt from the bank’s levy. Your wages are garnished by your creditors until the debt is paid in full.
Bank levy rules vary from state to state. If you live in a state with favorable bank levy rules, you may be able to protect some of your funds even if they don’t qualify as exempt funds.
A bank account that does not receive directly deposited statutorily exempt payments in New York, for example, cannot be restricted for the first $1,716; however, this sum rises to $2,500 if the account is receiving exempt payments.
A bank levy is not imposed in South Carolina, Maryland, North Dakota, or New Hampshire, because of the large amounts of money that are exempt from it. There is no further protection against a bank levy for states such as Florida, Hawaii and Texas unless the source of the funds are all legally exempt.
75 percent of your salary is generally protected against wage garnishment in most states. Because of this, the creditor can only take a maximum of 25 percent of your income. However, North Carolina, South Carolina, Florida, Texas, and Pennsylvania all shield 100% of your paycheck from garnishment.
Your chances of opening a new bank account increase if you choose to do it in a state with favorable bank levies and wage garnishment protection legislation. Because a creditor can levy your account multiple times until the debt is paid, this is why.
To begin, verify the legislation in your place of domicile, as they vary from state to state. You should look for a bank in a state with more favorable laws if your state doesn’t have any. Your new bank should not be a branch of your current bank, but a completely separate institution.
Of course, even if you create a bank account in South Carolina and have funds beyond the $5,000 exempt funds, you will not be protected from a bank levy if you have more than $5,000 in your account. A bank account in Texas provides 100% wage garnishment protection, but non-exempt funds are not protected in a bank levy.
If you’re not a resident of the state where the bank is located, you’ll want to double-check their regulations before opening an account. A new bank account can be opened by checking online or by calling the bank’s customer care line to acquire more information about it.
Open an LLC Business Bank Account
If you’re starting a business or already have one, you can take advantage of this option. Due to the ease of having only one bank account to deal with, most solo entrepreneurs keep their business and personal finances separate.
But if your personal bank account contains money that are tied to your business, you don’t want these assets to be blocked or taxed because of your personal debts.
When a Limited Liability Company (LLC) opens a commercial bank account, the courts will treat the company as a separate legal entity from the person owner. You can’t be garnished from your LLC’s bank account if your debt is personal in character.
Even while the LLC provides you with limited liability for your personal and commercial assets, you must take care to keep them separate. The court may be entitled to seize your business bank account funds if this happens.
A limited liability company is a good option if you’re just getting started with a new business, no matter how tiny. From $40 to $500, state filing fees can be paid. To open a business bank account for your LLC, call a bank to find out what the requirements are.
Open an Offshore Bank Account Through a Foreign LLC and Trust
You can’t just create an offshore bank account and forget about it since creditors can still access these funds by a court order and the judge can order you to pay back your creditors with these cash.
With an offshore trust and an LLC, several asset protection organizations propose establishing a bank account for the LLC. According to these tools, creditors should have a more difficult time getting their hands on the money.
You’ll need to speak with reputable lawyers and financial advisers in order to complete this process properly and accurately, which will clearly cost you money. If you’re merely seeking to safeguard a few thousand dollars, you may not want to go through this process.
Most typically, this is recommended to those with a large sum of money who wish to spread their assets out over time rather than invest their money right once. Attempting to avoid paying your creditors by moving huge sums of money to an offshore account after receiving a judgment against you may be considered fraudulent conveyance.
What type of bank accounts Cannot be garnished?
Regardless of where you live, certain forms of money are automatically excluded (protected) from creditors, including:
However, just because your money is safe doesn’t mean you can relax. To claim that the money is exempt, you must still follow your state’s procedure for doing so. Forms must be filed with the court and an appearance before a judge is required in the majority of states.
Can debt collectors seize your bank account in Florida?
Your bank account or earnings could be garnished if you live in Florida. First, they must file a lawsuit against you for the debt, after which they can register the judgment and proceed with debt collection, if they secure a verdict. Bank account freezing and wage garnishment are two methods of recouping money owed to a debtor, respectively.
Is Florida a debtor friendly state?
Because of the large number of assets that are excluded from litigation and civil judgements under Florida law, the state is regarded as a “debtor-friendly” jurisdiction. Three legal sources contribute to Florida’s debtor-friendly laws’ strength:
Florida Constitution
There are many essential safeguards in the Florida Constitution, including the well-known homestead protection, which is the foundational and most significant legal document in Florida.
Florida Statutes
There are many laws in Florida that safeguard various forms of assets against creditors, as well as the state’s legislature. In addition, there are statutes that help creditors recover judgements.
Florida Common Law
As a last point, there are safeguards based on what is known as “common law” or “law tradition.” Specific appellate judges construct the common law by their decisions in individual cases. Through their interpretation of Florida’s Constitution and statutes, the courts determine the state’s asset protection laws. It becomes part of the common law legal tradition to have consistent interpretations of the law Florida courts apply common law even when the concepts are contained in the state’s constitution or state statutes.
Can a debt collector sue you in Florida?
It is prohibited by the FCCPA for creditors and debt collectors to use abusive or harassing techniques. Creditors and debt collectors are prohibited by the FCCPA from engaging in certain practices, such as:
- talking about the debt with your employer, or threatening to do so, unless your employer has already initiated legal action against you
- making a negative impact on your reputation by exposing information to a third party (other than a family member) with knowledge or reason to believe that the recipient does not have a valid business motive for receiving it or that the information is incorrect.
- reporting or threatening to report unfavorable information about a disputed debt to a credit reporting agency without disclosing the existence of your dispute, even if you have disputed the charge.
- claiming to be attorneys or otherwise portraying themselves as such (this is also a potential violation of the FDCPA)
- using forgeries of official-looking papers, such as “summons,” to communicate with you
- use of vulgar, obscene, or abusive language with you or your loved ones
- sending you postcards or envelopes with embarrassing remarks or phrases on them, and
- When they know you have a lawyer, they can communicate with you directly. Statutory definition: (Fla. Stat. Ann 559.72).
If A Debt Collector or Creditor Violates the FCCPA
If a creditor or debt collector injures you in violation of the FCCPA, you have a private cause of action. As a result, you have the option to sue the debt collector or creditor in Florida. Depending on the outcome of your case, the court may grant you one of the following awards:
Florida’s Office of Financial Regulation can also be contacted to submit a complaint, as can the Consumer Financial Protection Bureau (CFPB). The Consumer Financial Protection Bureau (CFPB) will endeavor to receive a response from the collector within 15 days of receiving your complaint.
Federal FDCPA may also apply if a debt collector or debt buyer, but not an original creditor, conducts abusive or deceptive collection behavior.
Registration Requirements for Debt Collectors
The Florida Consumer Credit Protection Act (FCCPA) mandates that all debt collectors, regardless of where they are located, be registered with the state of Florida. In addition to the above, those who are not need to register include:
Remedies for Failing To Register
Up to $10,000 in fines, including legal expenses and costs, could be imposed on an unlicensed debt collector. However, if a collection agency fails to register, you do not have the right to sue. There is only one agency that may impose fines and enforce registration requirements: the Financial Services Commission of Florida’s Office of Financial Regulation (OFR). That debt collector can then be sued by Florida’s attorney general. Section 559.565 of the Florida Statutes.
How long can a creditor collect on a debt in Florida?
If you owe money, the statute of limitations in Florida is generally five years. If you owe money, a creditor has five years to begin legal action against you. Why? Because written agreements are the foundation of nearly all financial obligations.
Can a creditor take my house in Florida?
In Florida, can you be evicted from your home by your creditors? No. Contiguous land up to 160 acres in a county and up to a half-acre in a city are totally shielded from civil judgment creditors in Florida.
How long does a garnishment last in Florida?
Wage garnishments can usually only be sought once a judgment (a court order) has been obtained permitting the creditor to collect the debt. While a judgment is required for garnishment of wages for unpaid income taxes, court-ordered child support and student debts, there is an exception. Creditors have up to 20 years from the date of a judgment to collect the money they are owed. See 55.081 of the Florida Statutes. There is a far longer statute of limitations to collect on a judgment than there is to collect on other types of debts. Most other debts have a statute of limitations of five years. Cite this section of Florida law: 95.11.
