Garnishment Generally
Garnishment is an enforcement mechanism that redirects money owed to a debtor by a third party to the creditor. In a business context, this can include receivables owed to the business. The term is also sometimes used loosely in conversation to describe a bank levy, which is a different mechanism.
Bank Levy vs. Garnishment
A bank levy targets funds already held in the debtor’s account. Garnishment typically targets funds owed to the debtor by a third party. Both generally require a judgment and legal process, and both are subject to jurisdiction-specific procedures and exemptions.
Terminology and Procedure Vary by Jurisdiction
Some jurisdictions use “restraint” for bank accounts and “garnishment” for third-party obligations; others use overlapping terms. The actual document and the governing law determine what is happening.
What Is Generally Required
Before garnishment or levy of a business bank account, a creditor typically needs a judgment (or, in limited circumstances, another form of legal process). A UCC filing, a default, or a demand letter does not by itself garnish or levy an account.
A Judgment Is Not the Same as Immediate Garnishment
Even after a judgment, garnishment or levy requires additional procedural steps. The judgment opens the door; enforcement walks through it under jurisdiction-specific rules.
When Qualified Counsel May Be Appropriate
If you receive a garnishment or levy notice, or if your bank indicates funds are being held, qualified legal counsel may identify the instrument, its basis, exemptions that may apply, and potential responses.
Key Distinctions
Enforcement redirecting money owed to the debtor by a third party.
Enforcement targeting funds held in the debtor’s bank account.
The court order generally required before garnishment or levy.
Key Takeaways
- 01“Garnish” and “levy” are related but distinct; both generally require a judgment.
- 02A default, demand letter, or UCC filing does not by itself garnish an account.
- 03A judgment enables enforcement but is not immediate garnishment.
- 04Enforcement notices may warrant prompt review by qualified counsel.
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