Judgement Collection in Florida: Garnishment of Bank Accounts
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When a judgment creditor in Florida attempts to collect on a judgment involving an individual, one mechanism for doing so is through a garnishment action of the judgment debtor’s bank account. Florida has a statutory garnishment process that judgment creditors must follow. See Florida Statute Chapter 77.
Not all Bank Accounts Are Created Equal
However, not all bank accounts are subject to garnishment in Florida. In fact, certain bank accounts held by a debtor and his/her spouse, will not be the subject of garnishment. If the judgment debtor‘s bank account is held as “tenants by the entirety,” that bank account will likely not be subject to garnishment. This garnishment issue was recently the subject of the Florida case Versace v. Urvan, LLC.
In Versace, a judgement creditor obtained a judgment against Versace and, thereafter, obtained a writ of garnishment involving Bank of America, the judgment creditor claimed Versace had accounts with that bank. In response to the garnishment action, Versace filed a claim of exemption and motion to dissolve the writ of garnishment. Versace argued that bank account was not subject to garnishment.
The judgment creditor responded that the particular bank account did not meet the unities of title necessary for it to be exempt as a tenancy by the entireties account. Specifically, the judgment creditor argued the bank account lacked the unity of time because it was originally opened by the judgment debtor’s wife, alone, not by the judgement debtor.
While the trial court allowed garnishment of the bank account, the appellate court reversed. In doing so, the appellate court discussed the types of bank accounts created by husband and wife and whether all such bank accounts could be garnished. For example, the court noted that a bank account established and titled as a joint tenancy with right of survivorship is still subject to garnishment.
The Type of Bank Account Matters and Florida Statute 655.79
Indeed, the type of account held by a husband and wife determines whether it can be garnished by a creditor of either. A tenancy by the entirety account belongs to neither party and, therefore, it cannot be garnished by a creditor of one spouse.
In times past, the issue of how a bank account was titled might create issues, since banks frequently did not specify, on the signature card, the type of account which was being opened. However, in 2008, the Florida legislature attempted to simplify the process and amended section 655.79(1) of the Florida Statutes. The amended statute provides that any deposit or account made in the name of two persons, who are husband and wife, shall be considered a tenancy by the entirety account, unless otherwise specified in writing. With the enactment of amended Florida Statute section 655.79, the “unities of title” have all been eliminated from this garnishment analysis.
Judgment creditors seeking to garnish bank accounts in Florida should be aware of the Versace decision, as well as section 655.79 of the Florida Statutes, when seeking to collect on unpaid judgments. Indeed, all bank accounts are not created equal and all are not judgment proof.