When a Florida business fails to pay its debts, creditors may take legal action to collect the money. One option is to garnish the business’s bank account.
Garnishment allows creditors to collect money directly from a bank account. However, Florida law sets rules for when creditors can take this action and how businesses can respond.
When can creditors garnish an account?
Creditors usually need a court judgment before they can garnish a business bank account. A judgment confirms that the business owes money to the creditor. Once creditors obtain a judgment, they can ask the court for a writ of garnishment. They then send the writ to the bank that holds the business’s money.
Under Florida law, the bank must freeze funds that fall under the writ. As a result, the business cannot withdraw that money while the court process continues. However, Florida law also allows garnishment before a final judgment in certain cases. Creditors must meet additional legal requirements to use this option.
How can businesses challenge garnishment?
A business may challenge garnishment if the creditor makes a mistake or tries to collect money that does not belong to the business. For example, the business may dispute the debt amount or claim that the creditor failed to follow the proper legal steps.
It can ask the court to cancel the writ. In many cases, the business has 20 days from the date on the creditor’s required notice to file this request. If a bank freezes an account, business owners should:
- Review the court documents
- Check the amount the creditor claims
- Confirm who owns the money
- Look for possible errors in the garnishment
These steps can help owners decide what to do next. They should also act quickly because missing a deadline may limit their legal options.
How can businesses protect their finances?
A frozen bank account can make it difficult to pay employees, suppliers and other business expenses. Therefore, owners should explore their options before the problem affects daily operations.
Some businesses may negotiate a payment plan with creditors. However, reaching an agreement does not automatically release the frozen funds.
An attorney can review the garnishment and explain whether the business has grounds to challenge it. Legal advice may also help owners find ways to manage their debts and protect their operations.