Writ of Garnishment In Texas – An Overview For Banks
A writ of garnishment is a legal mechanism by which a judgment-creditor may garnish property belonging to a judgment-debtor by obtaining an order against a third party. Typically, writs of garnishment are for money, and banks are usually the (third-party) garnishee. This article assumes the garnishee is a bank, the property is cash, and that the suit is for a post-judgment writ.
Writ of Garnishment Procedure Overview
The judgment creditor institutes a separate legal proceeding by filing an application for a writ of garnishment with the court and naming the bank as garnishee. In that application, the judgment-creditor affirms that it believes the garnishee holds funds of the judgment-debtor. Provided the judgment-creditor followed the correct procedures, the bank must freeze any assets it holds of the judgment-debtor. If funds are available and no intervening events occur, the bank must ultimately turn over the property to the judgment-creditor
Reference Points For Bank Garnishees
- Once the judgment-creditor files a valid application for writ of garnishment, the court will issue a writ directed to the bank. The court typically provides the writ to the judgment-creditor for service.
- The judgment creditor must properly serve the writ. Only a constable or sheriff may serve a writ of garnishment. Any other method of service, including by private process server, is defective.
- A judgment-creditor may obtain a writ while the judgment is still within the plenary power of the court. A final judgment is not necessary to execute on a writ of garnishment.
- After service, the bank must file an answer in the proceeding. The date for answering in district and county court is by 10:00 am on the Monday next after the expiration of 20 days from the date of service. For justice court, the garnishee must answer by the Monday next after the expiration of 10 days from the date of service. The answer must set forth what, if any, assets it holds and the amounts of such.
- If the answer indicates no assets exist or did not exist at the time the court issued the writ, the court will discharge the bank.
- The court will default the garnishee if it does not answer. If the court defaults a garnishee, it may assess the entire amount of the judgment against the bank.
- After service, the bank must freeze withdrawal of funds by the judgment-debtor. If the court renders judgment in the garnishment proceeding in favor of the judgment-creditor, the bank must turn over all identified funds as of the date the judgment-creditor served the bank with the writ. The bank may recover its costs from the garnished funds.
Successful plaintiffs often use a writ of garnishment to collect on a judgment. And, since virtually all defendants have cash in financial institutions, banks must regularly deal with responding to a writ issuance. Legal proceedings like a writ of garnishment can become more complicated than a simple application, issuance, answer, and turnover. For example, the judgment-debtor can intervene since it is a party to the suit and has an interest in the subject-matter of the proceeding. Accordingly and to avoid its own liability, whether the writ proceeding is simple or more complex, banks will want to advise counsel right away upon receipt of a writ so the proper procedures may be implemented and pleadings timely filed.