Can Creditor Garnish Debtor’s Exempt Florida Bank Account At Bank Branch Located In Another State?

Questions from other attorneys are usually the most interesting; here’s an example. A Florida attorney called me about one of his clients who was concerned about a bank garnishment. The client and his wife had a permanent residence in Florida. While on a temporary work assignment in South Carolina, the husband was sued by a South Carolina company, and a South Carolina court entered a civil judgment. The husband and wife had previously opened a joint bank account at a Florida branch of a national bank. The joint bank account is exempt from garnishment by the husband’s individual creditors under Florida law because its considered tenants by entireties property.

The couple’s bank had branches in South Carolina which state does not recognize tenants by entireties ownership. The question was whether the South Carolina creditor could garnish the bank account at a South Carolina branch of the bank using a writ of garnishment issued by the South Carolina court that entered the judgment against the husband.

Florida exemptions can not be exported, so, for example, the husband’s creditor could probably garnish salary earned and paid in South Carolina even though the wages are exempt under Florida law. This debtor’s bank account is somewhat different in that the account was at a Florida branch and deposits were made in Florida. Not being sure of the answer, but intrigued by the question, I called a local creditor attorney who had garnished hundreds of bank accounts in his career.

The creditor attorney said that the best way to stop a South Carolina garnishment of the Florida account would be for the debtor’s wife to assert an exemption. Under Florida’s tenants by entireties law the non-debtor wife has an interest in 100% of the bank account. The South Carolina court has no personal jurisdiction over the non-debtor wife in this case. Therefore, the wife could raise a due process argument that the South Carolina court has no basis to garnish her money.

In this case, even assuming my creditor attorney friend is legally correct, at a minimum the non-debtor spouse would have significant costs to defend the account before a South Carolina judge who might not appreciate her argument and could garnish the account anyway. I always advise my clients never to bank at a national bank because its too easy for the creditor to attack the account outside Florida. I suggests that Florida residents concerned with asset protection bank only at small Florida community banks with no branches outside Florida. In addition to being creditor safe, these banks, I find, provide more personal service.

Last updated on May 22, 2020

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