Can an Internet Bank Account Be Garnished in Florida?

An account at an internet bank raises jurisdictional questions that do not arise with traditional banks. When a Florida creditor obtains a writ of garnishment and serves it on a local branch of Bank of America or Wells Fargo, the bank freezes the debtor’s accounts with little complication. But when the debtor’s money sits in an account at an online-only bank with no physical presence in Florida, the creditor faces a fundamental problem: the Florida court may lack jurisdiction over the bank and the account.

This jurisdictional question has become increasingly significant as more people move their banking to digital platforms. The answer depends on where the internet bank is chartered, whether the bank has any contacts with Florida, and how the deposit account agreement defines the location of the account.

Every Internet Bank Is Chartered Somewhere

There is no legal category called “internet bank.” Every bank that offers accounts online is a traditional bank chartered under either federal law or the law of a particular state. The bank has at least one physical office, a registered agent, and a home jurisdiction, even if it conducts all of its customer-facing business online.

Ally Bank, for example, is a Utah-chartered bank with its principal office in Sandy, Utah. SoFi Bank is a national bank chartered through the OCC with headquarters in Cottonwood Heights, Utah. Marcus by Goldman Sachs operates through Goldman Sachs Bank USA, a New York-chartered bank. Chime partners with Stride Bank, N.A. (Oklahoma) and Bancorp Bank, N.A. (Delaware) for deposit accounts.

The charter state and principal office location matter because Florida’s garnishment statute requires the court to have jurisdiction over the garnishee. A Florida court can exercise jurisdiction over a bank that maintains branches within the state. When the bank has no branches in Florida, the court’s ability to reach the bank through a garnishment writ depends on whether the bank has sufficient minimum contacts with Florida to satisfy due process requirements.

The Situs Question for Online Accounts

Garnishment is an in-rem proceeding that requires the court to have jurisdiction over the specific property being seized. For a bank account, this means the court must have jurisdiction over the account itself, not just over the debtor who owns it. The legal question is where the account is “located” when the bank exists purely online.

Florida courts have traditionally treated bank accounts as located where the bank branch holding the account is situated. When an account is opened at a specific branch, the situs of the account is the location of that branch. This framework works well for traditional banking but breaks down when the account has no branch association whatsoever.

For an account at an internet-only bank, several possible situs rules could apply. The account could be treated as located at the bank’s charter state. It could be treated as located where the bank’s servers or principal office are situated. It could be treated as located at the debtor’s domicile on the theory that intangible property follows its owner. Or the account could be located wherever the deposit account agreement designates.

Florida case law has not definitively resolved which rule applies to purely online accounts. What the cases do establish is that an internet bank is not automatically subject to garnishment writs from every state where it accepts deposits. Simply offering online banking to Florida residents does not by itself establish the kind of jurisdictional presence that would allow a Florida court to reach the bank through a garnishment writ.

National Banks and the Split in Florida Courts

A related but distinct question involves national banks that operate branches in Florida but maintain specific accounts outside the state. The majority of Florida courts have permitted creditors to garnish accounts at national banks by serving a local Florida branch, even when the specific account was opened elsewhere. Banks often comply with these writs because they face potential liability for ignoring a facially valid court order.

However, a minority of federal courts in Florida have reached a different conclusion. In the FDIC v. Amos line of cases, courts held that a Florida court cannot garnish an account at a nationally chartered bank if the account was opened and maintained at an out-of-state location, even when the bank has branches in Florida. The reasoning in these cases is that the relevant inquiry is where the account relationship exists, not where the bank happens to have a physical presence.

The implications for internet banking are significant. If the minority view gains traction, an account at any national bank that is maintained online without a branch relationship could be difficult to garnish in Florida, because no Florida branch “holds” the account. The account exists in the bank’s centralized digital system, and its situs—if the Amos reasoning is applied—would be wherever the bank is chartered or where the account agreement places it.

How Deposit Account Agreements Define Situs

Many banks address the location question in their deposit account agreements. The terms and conditions that the account holder accepts when opening the account may specify which state’s laws govern the account and where the account is deemed to be located for legal purposes.

A bank chartered in Utah whose deposit agreement states that all accounts are governed by Utah law and are deemed located in Utah has effectively defined the situs of its accounts. A creditor seeking to garnish that account from a Florida court would face a strong argument that the account is located in Utah and falls outside the Florida court’s jurisdiction.

Not all deposit agreements contain clear situs provisions. Some are silent on the question, which leaves the situs analysis to the court. Others use ambiguous language that could support multiple interpretations. A debtor who wants to understand whether their internet bank account is potentially beyond the reach of a Florida garnishment writ should review the deposit agreement’s choice-of-law and governing jurisdiction provisions.

The banking industry has become more attentive to this issue. Regulatory guidance and enforcement actions have highlighted the competing liabilities banks face when processing out-of-state garnishment orders. A bank that freezes an account in response to a garnishment writ from a state that lacks jurisdiction over the account risks liability to the account holder. A bank that refuses to comply with a facially valid writ risks liability to the creditor. Clear situs provisions in deposit agreements help banks manage this tension.

What a Florida Creditor Can Do Instead

A Florida creditor who cannot reach an internet bank account through a Florida garnishment writ has several alternative collection tools.

The creditor can domesticate the Florida judgment in the state where the internet bank is chartered. Under the Uniform Enforcement of Foreign Judgments Act, the creditor files a certified copy of the Florida judgment with the court in the bank’s home state. After notice to the debtor and any applicable waiting period, the domesticated judgment becomes enforceable under the laws of that state.

The creditor can then obtain a garnishment writ from the local court and serve it on the bank in its home jurisdiction. This process works, but it requires retaining local counsel in the bank’s state, paying additional filing fees, and waiting through the domestication timeline.

The creditor can also use post-judgment discovery in the Florida case to compel the debtor to disclose all bank accounts, regardless of location. Florida courts have broad authority to order debtors to answer interrogatories and appear for depositions about their assets. If the debtor discloses an internet bank account, the court can issue a turnover order directing the debtor to transfer funds from the account to satisfy the judgment. The turnover order is directed at the debtor personally, not at the bank, and does not require jurisdiction over the bank itself.

A debtor who refuses to comply with a turnover order faces contempt of court sanctions, including potential incarceration. This enforcement mechanism bypasses the jurisdictional limits on garnishment by operating against the debtor rather than against the bank.

Why Internet Banking Is Not Asset Protection

The jurisdictional difficulty of garnishing an internet bank account creates a practical obstacle for creditors, but it is not a form of asset protection. The funds in the account are not exempt from collection. The debtor still owes the judgment, must disclose the account in post-judgment discovery, and can be ordered to turn over the funds.

A debtor who opens an internet bank account specifically to avoid garnishment also risks a fraudulent transfer challenge. If the debtor moves funds from a local bank to an internet bank after a lawsuit is filed or a judgment is entered, the creditor can argue that the transfer was made with the intent to hinder, delay, or defraud creditors. The jurisdictional barrier to garnishment does not protect the transfer itself from being unwound.

The practical difficulty and expense of cross-state garnishment may discourage some creditors, particularly those with smaller judgments where the cost of domestication and out-of-state counsel exceeds the expected recovery. For creditors with larger judgments and the resources to pursue them, the internet banking barrier adds cost and delay but does not prevent eventual collection.

Debtors seeking genuine protection for bank account funds should focus on statutory exemptions and proper account structuring rather than on the location of the bank. Head of household wages deposited in a segregated account are protected under § 222.11 regardless of which bank holds the account. Tenants by entireties accounts between married spouses are protected from individual creditors regardless of the bank’s location. These exemptions provide real legal protection, while banking at an internet-only institution provides only a procedural hurdle.