Can a Bank Account in Another State Be Garnished?

A Florida judgment creditor cannot simply garnish a debtor’s bank account held at a financial institution in another state. Florida courts require both personal jurisdiction over the debtor and in-rem jurisdiction over the property being garnished, and an out-of-state bank account falls outside the court’s territorial reach. This jurisdictional limitation creates a meaningful barrier for creditors, but it does not make the funds permanently untouchable.

Creditors can overcome this barrier through judgment domestication, which involves registering the Florida judgment in the state where the bank account is located. The process adds time, expense, and complexity to the creditor’s collection effort. For debtors, understanding how cross-state garnishment works is essential for evaluating which accounts are genuinely protected and which are merely difficult to reach.

Why Florida Courts Cannot Garnish Out-of-State Accounts

Florida garnishment law under Chapter 77 requires the court to have jurisdiction over both the judgment debtor and the garnishee holding the debtor’s property. When a bank account is maintained at an institution outside Florida, the Florida court lacks in-rem jurisdiction over the funds. Without authority over the property itself, the court cannot issue an effective writ of garnishment.

Creditors have argued that modern banking renders the physical location of an account irrelevant. If funds can be accessed digitally from anywhere, the argument goes, the account should be treated as present wherever the debtor resides. Florida courts have consistently rejected this reasoning. Despite the digital nature of banking, accounts are still considered located where the bank’s branch is physically situated or where the account agreement designates.

This principle was reinforced in several federal court decisions within Florida. In APR Energy, LLC v. Pakistan Power Resources, LLC (M.D. Fla. 2009), the court held that garnishment requires jurisdiction over both the garnishee and the property held by the garnishee. The Southern District of Florida reached the same conclusion in Skulas v. Loiselle (S.D. Fla. 2010), dissolving a writ of garnishment directed at a PNC Bank account that had been opened and maintained at a Pennsylvania branch, even though PNC had branches in Florida.

The National Bank Problem

The jurisdictional question becomes more complicated when the debtor holds an account at a national bank with branches in both Florida and another state. In practice, many creditors serve writs of garnishment on a local Florida branch of a national bank, and the bank freezes accounts across its entire system. The bank complies because it faces potential liability if it ignores a facially valid writ.

However, a minority of federal courts in Florida have held that a Florida court cannot garnish an account at a nationally chartered bank if the account was opened and maintained outside Florida, even when the bank operates Florida branches. In the Skulas case, the court dissolved a garnishment writ served on PNC’s Florida branch because the underlying account was a Pennsylvania account. The court reasoned that the relevant inquiry is where the account relationship exists, not where the bank happens to have a physical presence.

This split in judicial interpretation has significant practical implications. A debtor who opens an account at a major national bank through an out-of-state branch may have a viable jurisdictional defense if a Florida creditor attempts to garnish that account through a local branch. Whether the defense succeeds depends on the specific court, the facts of the case, and whether the debtor can establish that the account was originated and maintained outside Florida.

Judgment Domestication: How Creditors Reach Out-of-State Accounts

The primary tool creditors use to reach bank accounts in other states is judgment domestication under the Uniform Enforcement of Foreign Judgments Act. Nearly every state has adopted some version of this act, which allows a judgment obtained in one state to be registered in another and enforced as if it were a local judgment.

The domestication process typically works in several stages. The creditor files a certified copy of the Florida judgment with the clerk of court in the state where the bank account is located. The creditor then serves the debtor with notice that the judgment has been domesticated. After a waiting period that varies by state, the domesticated judgment becomes enforceable, and the creditor can pursue all local collection remedies, including garnishment of bank accounts within that jurisdiction.

Domestication is not instantaneous. The creditor must retain local counsel in the target state, pay filing fees, and comply with that state’s procedural requirements. The notice period gives the debtor time to respond, and in some cases, to move assets before the creditor can act. For these reasons, domestication is expensive and time-consuming enough that many creditors with smaller judgments will not pursue it.

Federal courts offer a streamlined alternative. Under 28 U.S.C. § 1963, a judgment entered in one federal district court can be registered in any other federal district court without providing notice to the debtor. This registration process is faster and can allow a creditor to garnish bank accounts before the debtor learns the judgment has been transferred. Debtors facing federal court judgments face a higher risk of cross-state garnishment.

Which State’s Exemptions Apply?

When a creditor domesticates a judgment and garnishes a bank account in another state, a threshold question is which state’s exemption laws govern. The answer generally depends on the state where the garnishment is executed.

If a Florida debtor holds an account in Texas, and a creditor domesticates the Florida judgment in Texas, the garnishment proceeding in Texas will apply Texas exemption law. Texas is one of four states that prohibit wage garnishment entirely for most consumer debts and provides broad protections for certain account types. Conversely, if a Texas creditor domesticates a judgment in Florida, Florida’s exemptions—including the head of household wage exemption and protections for tenants by entireties accounts—would apply.

This creates a strategic dimension. A debtor who understands the exemption laws of various states can make informed decisions about where to maintain financial accounts. An account held in a state with strong garnishment protections may be significantly harder for a creditor to reach, even after domestication, than the same funds held in a state with weaker protections.

Online Banks and the Situs Question

Online banks that operate without traditional branches raise novel jurisdictional questions. If a Florida debtor opens an account with an internet-only bank chartered in Utah, where is the account “located” for garnishment purposes?

Florida case law suggests that internet banks are not automatically subject to garnishment writs from every state where they accept deposits. The analysis turns on whether the bank has sufficient contacts with Florida to subject it to the Florida court’s jurisdiction. An online bank that does not maintain branches in Florida, does not specifically target Florida customers, and is chartered in another state may fall outside the reach of a Florida writ of garnishment.

From a debtor’s perspective, this means an account at a purely online bank may be more difficult for a Florida creditor to garnish than an account at a traditional bank with local branches. The creditor would need to domesticate the judgment in the state where the online bank is chartered and pursue garnishment there. From a creditor’s perspective, the proliferation of online banking has made cross-state garnishment more complex and more expensive.

Strategic Use of Out-of-State Banking

Some states offer legal frameworks that make bank account garnishment substantially more difficult for creditors. A handful of states either prohibit certain types of bank account garnishment or impose procedural requirements so burdensome that garnishment becomes impractical for most creditors.

Depositing funds in a bank located in one of these states does not make the money exempt. The protection comes not from an exemption but from the practical difficulty of executing a garnishment in that jurisdiction. A creditor must still domesticate the Florida judgment, retain local counsel, and comply with the restrictive state’s garnishment procedures. For many creditors, especially those with moderate-sized judgments, the cost of pursuing garnishment in a restrictive state exceeds the expected recovery.

This strategy has limitations. A debtor who moves assets to an out-of-state account after a lawsuit is filed or a judgment is entered may face a fraudulent transfer challenge. The timing of the account opening matters. An account established as part of long-term financial planning before any liability exists is far more defensible than one opened in response to a pending judgment.

Additionally, debtors are subject to post-judgment discovery obligations. A Florida court can compel a debtor to disclose all bank accounts, regardless of where they are located, through interrogatories and depositions. A debtor who lies about the existence of an out-of-state account faces contempt of court sanctions. The jurisdictional barrier prevents a Florida court from garnishing the account directly, but it does not prevent the court from ordering the debtor to turn over funds held in that account under a turnover order directed at the debtor personally.

Federal Creditors Bypass State Jurisdiction Limits

The jurisdictional limitations that protect out-of-state accounts from Florida creditors do not apply to the federal government. The IRS, Department of Justice, SEC, and other federal agencies can levy bank accounts anywhere in the United States regardless of which state issued the underlying judgment or where the account is maintained.

Federal debt collection under 28 U.S.C. § 3205 allows the government to serve garnishment orders on any financial institution in any state. The bank must comply regardless of state jurisdictional rules. For debtors facing IRS tax liens, SEC disgorgement orders, or other federal obligations, an out-of-state bank account provides no additional protection.

When Out-of-State Creditors Target Florida Accounts

The jurisdictional analysis works in both directions. A creditor with a judgment from another state who wants to garnish a debtor’s Florida bank account must domesticate the judgment in Florida first. Florida has adopted the Uniform Enforcement of Foreign Judgments Act under § 55.501–55.509 of the Florida Statutes, which provides a straightforward process for registering out-of-state judgments.

Once domesticated, the out-of-state judgment carries the same force as a Florida judgment, and the creditor can pursue garnishment under Chapter 77. Florida’s exemptions will apply, which means the debtor can claim protections for head of household wages, retirement account distributions, tenants by entireties accounts, and other exempt categories.

Debtors who have relocated to Florida from another state should be aware that judgments from their former state of residence can follow them. Domestication is a relatively simple process for creditors, and Florida’s strong exemption laws may be the debtor’s most important line of defense once the judgment is registered.