A grandmother recently wrote me about her granddaughter in North Platte, Nebraska struggling to pay back medical debts.  Her creditors were garnishing 25% of her paychecks but they also garnished her bank account as well leaving her with no funds pay rent, utilities or even food.  Can creditors do this?  May a creditor garnish the paycheck and all the bank account funds at the same time?

Yes, a creditor may garnish paychecks and bank accounts at the same time unless you assert your exemption rights.  Exemption laws protect your basic property, but in Nebraska you must file a request for an Exemption Hearing with the court to protect your property from creditor garnishments.

Here is what you need to do to stop a bank garnishment.

1. Request a Court Hearing.  A written request for a garnishment hearing must be filed with the Clerk of the Court with in 3 days after receiving notice of the garnishment.  Yep, you read that right—you have only 3 days to request a garnishment hearing after receiving a notice of the garnishment.  Request for Garnishment Hearing
2. File an Inventory:  Only so much property is protected by Nebraska exemption laws, so the Court requires an inventory of your property to determine how much property is exempt.  In most cases all of a judgment debtor’s property is exempt.  Here is an Inventory Form.
3. List all Liens Against Property:  If you own a home or a car or furniture that is subject to a bank lien, list the amount of the lien.
4. Claim the Exemption Law:  Nebraska has about a dozen exemption laws, mostly contained in Chapter 25 of the Nebraska Statutes.  Cite the exemption law that protects each property item.   Nebraska Statute 25-1552 protects up to $2,500 of money in a bank account.  Married debtors with a joint account may protect up to $5,000.
5. Attend the Court Hearing:  You don’t have to say much in court, just ask the judge to look at the inventory you filed and the exemption laws cited.

I would estimate that more than 95% of the bank account garnishments that occur in Nebraska could be avoided by following this outline.