Worried about a bank account garnishment? I don’t think a Virginia Court can garnish an online bank.
More and more people may be safe from bank account garnishment, even before bankruptcy, because their bank is only online. The banks I’m talking about are pre-paid debit card banks: Chime, Marcus, Ally, Axos, Varo, Radius, Green Dot.
I don’t think those online banks can be garnished by a Virginia court.
When people call me for a consultation, they are worrying about having their bank account garnished before we can complete work on the bankruptcy papers. I tell them they can breath easier if their money is in a pre-paid card online bank.
Recently, I saw a court case, St Mary’s v Thompson, from Michigan. It helped me understand. The Michigan Court ruled they did not have the power to garnish Ms. Thomson’s employer, a hospital in Illinois. The lawyer for Ms Thompson then turned around and sued the lawyer for St. Mary’s, for violating the Fair Debt Collection Practices Act. (I’m told the lawyer for St Mary’s is appealing.)
Virginia Court can’t garnish an online bank
On line banks don’t have branches in Virginia. So they can’t be garnished by a Virginia court.
I then found this Maryland case, Ghazzaoui v Chelle. In that case a Mr Ghazzaoui used a Maryland Court to try to garnish an account at a DC Credit Union. The credit union had members who lived in Maryland but its only location was in DC. The Maryland court said, no, can’t do it.
Based on that, I think a Virginia court could not garnish a Maryland Credit Union. Tower FCU is the largest Credit Union in Maryland and has no branches in Virginia.
I don’t think a Virginia court can garnish an online bank. I can’t find where any Virginia Court has said that, but I’ve never seen it tried.
I’m guessing that Virginia debt collection lawyers don’t want to try it, because they might get sued themselves for a Fair Debt Collection Violation.
I’ve been telling people for a couple years that I’ve never seen a garnishment on an online bank. Now that I’ve looked into it and I understand why.