How to Protect Your Bank Account from Creditors

A judgment creditor can serve a writ of garnishment on any bank where the account holder maintains an account. The bank freezes the account immediately, and the account holder must prove that some or all of the frozen funds are exempt under federal or state law. Protection depends on the source of the funds, the ownership structure of the account, and the ability to document both.

Bank account garnishment is one of the most common collection tools used under Florida’s judgment collection framework, and knowing which exemptions apply is the first step toward keeping access to deposited funds.

No single account type is immune from every creditor in every situation. But federal and state exemptions create a framework that, when applied correctly, can shield most or all of a bank balance from garnishment. The key is understanding which protections apply, structuring accounts to preserve those protections, and keeping the records needed to prove an exemption if an account is frozen.

Can a Bank Account Be Garnished Without Notice?

A bank account cannot be garnished without legal process, but the practical experience often feels like it happens without warning. The creditor must first file a lawsuit, serve a summons and complaint, and obtain a judgment. That litigation process requires notice. Once a judgment is in hand, however, the creditor applies for a writ of garnishment and serves the writ directly on the bank. The bank freezes the account the moment the writ arrives.

The account holder typically learns about the garnishment only after the freeze is already in place. The bank sends a notice within a few business days explaining the amount frozen, any automatically protected funds, and the right to claim exemptions. By that point, no non-protected funds can be accessed until the court resolves the exemption claim.

The full timeline from lawsuit to freeze can unfold faster than most people expect, and bank account garnishment without notice is a common complaint even though the law technically requires a prior judgment.

Approximately 70% of debt collection lawsuits result in default judgments, often because the person sued never responded to the initial complaint. Someone who ignores a debt collection lawsuit may discover the judgment only when a bank account freeze reveals it. The time to respond is when the lawsuit is served, not after the account is frozen.

Government creditors operate under different rules. The IRS can freeze a bank account without a court judgment by issuing a levy after providing 30 days’ written notice. State tax authorities have similar powers. Child support enforcement agencies can also garnish without the standard lawsuit process.

What Is an Exempt Bank Account?

An exempt bank account is a bank account whose funds are legally protected from seizure by judgment creditors. The protection comes from federal or state laws that shield certain types of money—Social Security benefits, disability payments, or wages earned by a head of household—from garnishment even after a creditor obtains a court judgment.

The phrase “exempt bank account” is widely used but technically imprecise. No bank offers a product called an exempt bank account. The exemption attaches to the funds inside the account, not to the account itself. A single checking account can contain both exempt funds (such as directly deposited Social Security benefits) and non-exempt funds (such as rental income), and only the exempt portion is protected.

The protection follows the source of the money or the ownership structure of the account. An account containing nothing but Social Security direct deposits is functionally exempt because every dollar in it traces to a protected source. An account that mixes exempt and non-exempt deposits forces the account holder to trace each dollar back to its origin to prove which portion is protected.

Three categories of protection apply to bank accounts in Florida: federal benefit protections that operate automatically, state exemptions that the account holder must claim, and ownership structures that prevent garnishment by individual creditors.

Federal Benefit Protections for Bank Accounts

Federal law provides the strongest and most automatic form of bank account protection. Under 31 CFR Part 212, when a bank receives a garnishment order, it must review the account’s deposit history for the preceding two months. The bank identifies all federal benefit payments that were directly deposited during that period and calculates a “protected amount” equal to those deposits or the current balance, whichever is lower. The bank must leave the protected amount accessible without any action required from the account holder.

The benefits covered by this automatic protection include Social Security retirement and disability payments, Supplemental Security Income (SSI), Veterans Affairs benefits, Railroad Retirement benefits, and federal civilian and military retirement payments. SSI receives the broadest protection because it cannot be garnished even for child support or federal tax debts—exceptions that apply to most other federal benefits.

The automatic protection applies only to benefits deposited electronically through direct deposit. Paper checks deposited manually do not trigger the automated review. Someone who deposits paper benefit checks must prove the funds are protected through the state’s claim of exemption process, which requires documentation and a court hearing. Enrolling in direct deposit converts a protection that must be proved in court into one the bank must provide automatically.

The two-month lookback means federal benefit funds lose their automatic protection if they remain in the account for more than sixty days without additional deposits. Someone who receives $2,000 per month in Social Security and accumulates a $20,000 balance will find that only the most recent $4,000 is automatically protected. The remaining $16,000 can be garnished unless the account holder can trace it to exempt sources through the state exemption process.

State Wage Exemptions

Federal law under the Consumer Credit Protection Act limits garnishment to 25% of take-home pay or the amount by which weekly earnings exceed 30 times the federal minimum wage, whichever produces a smaller garnishment. Many states provide stronger protections.

Four states prohibit wage garnishment entirely for most consumer debts: Texas, Pennsylvania, North Carolina, and South Carolina. In these states, a creditor cannot garnish wages directly from the employer. However, once wages are deposited into a bank account, they may lose their protection in some jurisdictions.

Florida’s head of household exemption is particularly powerful. If the wage earner provides more than half the financial support for a child or dependent and earns $750 per week or less after taxes, all wages are exempt from garnishment. Wages above $750 per week are also exempt unless the wage earner has signed a written waiver in 14-point type.

Florida extends the exemption to deposited wages for six months after the bank receives them, provided the funds can be traced and properly identified as earnings. Mixing wages with non-exempt income does not automatically defeat the exemption, but it makes proving the protected portion harder.

Maintaining a dedicated wage account that receives only payroll direct deposits makes it easy to prove the funds are protected. When every deposit in the account originates from exempt wages, the exemption claim requires only proof of head of household status and the deposit records.

Tenancy by the Entirety Bank Accounts

Married couples in Florida can hold bank accounts as tenants by the entirety, a form of ownership that treats the couple as a single legal unit. A creditor with a judgment against only one spouse cannot garnish a tenancy by the entirety account because the account does not belong to either spouse individually. Florida Statute 655.79 provides that joint accounts held by married couples are presumed to be entirety accounts unless otherwise specified in writing.

A 2023 Florida appellate decision complicated this presumption. In Storey Mountain LLC v. George, the Fourth District Court of Appeal held that a bank’s customer agreement disclaiming tenancy by the entirety ownership could override the legal presumption that joint accounts between spouses are entirety accounts. Married couples should review their bank’s customer agreement and signature card to confirm that entirety ownership is not disclaimed. If the agreement contains such language, opening the account at a different institution that does not disclaim entirety ownership is a straightforward solution.

Tenancy by the entirety protects only against creditors of one spouse. A judgment against both spouses jointly, a federal tax lien, or a claim arising from joint liability reaches the entirety account.

The Eleventh Circuit’s November 2025 decision in Storey Mountain v. Del Amo reinforced that generic “joint tenants with right of survivorship” language on a bank signature card is not enough to disclaim the entirety presumption under Section 655.79. This provides reassurance that the presumption favoring married couples remains strong absent an explicit contractual disclaimer. Joint bank account protection depends on matching the correct ownership structure to the specific creditor exposure.

How to Open a Bank Account That No Creditor Can Touch

Protecting a bank account from creditors is not a single action but a series of decisions about how accounts are opened, funded, and maintained.

Identify Exempt Income Sources

Determine whether the account holder receives Social Security, SSI, VA benefits, or other federal benefit payments. Determine whether the account holder qualifies as head of household under Florida’s wage exemption. Each exempt income stream should be directed to its own dedicated account.

Enroll in Direct Deposit for All Federal Benefits

The automatic protection under 31 CFR Part 212 applies only to electronically deposited funds. Switching from paper checks to direct deposit converts a protection that must be proved in court into one the bank must provide automatically when a garnishment order arrives.

Open a Separate Account Exclusively for Exempt Funds

Non-exempt income should not go into this account. If the only income is Social Security, every dollar in the account is automatically protected. If the account holder also receives non-exempt income, that income should go to a different account. The goal is a clean account where every deposit traces to an exempt source without analysis.

Open a Properly Titled Entirety Account for Marital Funds

For married couples, request that the bank designate the account as tenants by the entirety on the signature card and account records. Review the customer agreement to confirm it does not disclaim entirety ownership. Both spouses should be present when the account is opened.

Maintain Records

Keep monthly statements, benefit award letters, and pay stubs documenting the source of every deposit. If a garnishment occurs, the burden of proving an exemption falls on the account holder. Clear records determine whether an exemption claim succeeds or fails.

No combination of domestic account structuring makes a bank account completely untouchable by every creditor. But these steps, applied consistently, maximize the protections available under federal and state law.

What Types of Bank Accounts Cannot Be Garnished?

Several account structures provide meaningful protection from garnishment, though none is absolute.

Accounts containing only direct-deposited federal benefits are automatically protected under Part 212 for up to two months of deposits. The bank must identify and preserve these funds without any action from the account holder.

Tenancy by the entirety accounts held by married couples in Florida are protected from garnishment when only one spouse owes the debt. The account must be properly titled, and the bank’s customer agreement must not disclaim entirety ownership.

Dedicated wage accounts holding only head of household earnings are protected for six months after deposit under Florida Statute 222.11. The account holder must be able to trace the funds to exempt wages and prove head of household status.

In-trust-for accounts and pay-on-death accounts do not protect the account from the depositor’s creditors during the depositor’s lifetime. These designations affect who receives the funds at death, not whether creditors can reach them before death.

Accounts at online banks, fintech platforms, and digital wallets (including Cash App, Venmo, and Chime) are subject to garnishment under the same rules as traditional bank accounts. A creditor who locates the account can serve a garnishment order on the institution. Some fintech platforms market themselves as “garnish free” or exempt, but no financial institution can override a valid court order. The same federal and state exemptions apply regardless of where the account is held.

The rules governing bank account garnishment vary significantly by state. Several states prohibit or sharply limit bank account garnishment through wage exemptions, bank levy restrictions, or general-purpose exemptions that protect a set dollar amount in any account.

What Does Not Protect a Bank Account from Creditors

Several commonly suggested strategies for protecting bank accounts from creditors are ineffective or counterproductive.

Transferring funds to a family member’s account after learning of a lawsuit or judgment is a fraudulent transfer under Florida Statute 726. The creditor can reverse the transfer and may obtain additional sanctions. Courts routinely scrutinize transfers made after someone knows about pending or potential claims.

Opening a bank account in another state does not help if the creditor can locate the account. Creditors use court-ordered discovery tools (written questions, depositions, and subpoenas) to identify financial accounts. Someone who lies under oath about account locations faces jail for contempt. The garnishment follows the person, not the state where the bank is located.

Keeping large amounts of cash outside the banking system avoids garnishment but creates risks including theft, loss, and the inability to prove the source of funds if an exemption is later needed.

Converting non-exempt funds to exempt assets may work under some circumstances, but the timing matters. If the conversion occurs while the person is insolvent or after a creditor obtains a judgment, it may be challenged as a fraudulent transfer.

How Creditors Find Bank Accounts

After obtaining a judgment, creditors have powerful court-backed tools to locate financial accounts. A creditor can serve written questions requiring disclosure of all bank accounts, send subpoenas directly to financial institutions, and conduct depositions where the account holder must answer questions under oath.

Florida Rule of Civil Procedure 1.977 requires the person who owes the judgment to complete a Fact Information Sheet disclosing all financial accounts, and failure to comply can result in fines or jail. Creditors also use subpoenas served directly on banks, depositions where the account holder must answer questions under oath, and written questions that require disclosure of every account. The practical reality of how creditors locate bank accounts makes concealment an unreliable strategy.

Claiming Exemptions After a Garnishment

After the bank freezes the account, the account holder receives notice and has 20 days under Florida law to file a Claim of Exemption and Request for Hearing. The claim must identify the specific exemption—head of household wages, Social Security benefits, disability income, or other protected source—and include supporting documentation: bank statements showing deposit sources, benefit award letters, pay stubs, and tax returns establishing dependent status.

If the creditor does not contest the claim, the court releases the frozen funds. If the creditor disputes it, the court schedules a hearing where the account holder must prove the exemption. Missing the 20-day deadline can result in automatic release of funds to the creditor, even if the funds were actually exempt. Courts have very little flexibility to extend this deadline.

When Bank Account Exemptions Are Not Enough

Federal and state bank account exemptions are designed to ensure that people retain enough money to meet basic living expenses. They are not designed to protect substantial liquid wealth. Someone with $500,000 in non-exempt cash will not find domestic exemptions sufficient.

For individuals with significant liquid assets and meaningful creditor exposure, asset protection planning beyond domestic bank account structuring may be appropriate. Offshore accounts held through foreign legal entities and irrevocable trusts established in jurisdictions with strong asset protection statutes create legal barriers that domestic judgment creditors cannot easily overcome. These structures involve costs, compliance obligations, and tradeoffs in access and control that should be evaluated with legal counsel before implementation.

The threshold question is whether available domestic exemptions are sufficient for the amount at stake. For someone whose bank account contains only Social Security deposits and exempt wages, the framework described above may provide all the protection needed. For someone with substantial non-exempt liquid assets, it will not.