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boamot · May 14, 2010, 08:37 AM

I have a friend who's a small business owner. He recently had a garnishment placed against his corporation and his wife, not him personally. He receives checks monthly made payable to himself, the corporation and his wife and is afraid to deposit them into his business account due to the garnishment. Are they entitled to the funds even though his name is on it personally? How is the garnishee notified that funds are in his account? I had heard that the garnishment only lasts for like 48 hours at a time and that is must be resubmitted byt the garnishee constantly? He has bills to pay for the corporation but it unable to cash these funds due to not being able to deposit the checks for fear of the garnishment eating them up. He currently has a counter suit against the garnishee equal to the amount of the garnishment, so it's not like he's trying to avoid paying, his countersuit involves criminal activity and personal injury far exceeding the amount of the garnishee's claim. Any suggestions? Confusing and complicated!

JudyKayTee · May 14, 2010, 09:38 AM

Is his wife's name on the account? If it is NOT the account cannot be seized for debt.

I'm confused, too - is he incorporated, a d/b/a, something else?

boamot · May 14, 2010, 10:08 AM

He is incorporated. The check is made payable to him personally, the corporation and his wife. The garnishment is against the tax id # of the coporation and his wife, not him. The corporate account is negative by the amount of the garnishment and no funds can be deposited therefore checks can not be cashed.

Fr_Chuck · May 14, 2010, 04:44 PM

Why is the check made out to him personally and the corporation.

This is a real, very serious issue.
1. if they put corporation money into a personal account, it mixes money and may allow them to go after personal funds also

2. if he puts it into corp money, they can take it.

Garnishments last as long as the account is open and not fully paid

AK lawyer · May 14, 2010, 10:52 PM

Are they entitled to the funds even though his name is on it personally?

It is not clear why the checks are payable to him, his wife, and the corporation. As Fr. Chuck has said, mixing finances like this opens him up to personal liability ("piercing of the corporate veil") and therefore is a real bad idea. But yes, if the funds are in the corporate account, and the writ is directed at the corporation, they can be seized by garnishment.

How is the garnishee notified that funds are in his account? I had heard that the garnishment only lasts for like 48 hours at a time and that is must be resubmitted byt the garnishee constantly?
You are, I think, using the wrong term and this is confusing us. "Garnishee" properly refers to the entity which owes money to the judgment debtor. In this case, it would be your friend's corporation and his wife. The judgment creditor would be the "garnisher". I will answer these questions as though you had used the term "garnisher".

The garnishee must reply to the service of the writ of garnishment by generally notifying the officer who served the writ the amount that is in the account. This 48 hour thing may be correct, depending on your particular state law.