Indiana Bank Garnishment After Judgment

Wage garnishment works when the debtor has a steady job. But what about the money already sitting in a bank account? Indiana lets you freeze and collect those funds through the Depository Financial Institutions Adverse Claims Act — and the process is faster than most creditors expect.

How Bank Garnishment Works in Indiana

Bank garnishment is initiated through a Proceeding Supplemental filed under your original case number. You serve the debtor's bank with a motion for proceedings supplemental, garnishee interrogatories, and a court order restricting withdrawals.

Under IC 28-9-4-2, the bank must place an immediate hold on the account the moment it receives valid service. The frozen amount is the lesser of:

• The unpaid balance of your judgment (including accrued costs and interest), or
• The account balance at the time service is received

The bank may subtract one-half of its statutory administrative fee from the frozen amount.

The 90-Day Clock

The bank's hold expires automatically 90 days after the bank receives notice unless the court enters a final order directing turnover. Freezing the account does not transfer money to you — you still need the court to order the bank to release the funds to the clerk of court.

This means you need to move quickly after the hold is placed. Get your hearing scheduled and obtain a final garnishment order before the 90 days run out.

The $450 Intangible Property Exemption

Indiana protects $450 in intangible personal property in total per individual under IC 34-55-10-2(c)(3), or $900 for joint debtors. This aggregate exemption covers cash, bank account balances, stocks, and securities; it is not a separate allowance for each account.

In practice, if the debtor has $2,000 in the account and no other intangible property using the exemption, $450 is protected and $1,550 is available for garnishment (subject to any other applicable exemptions).

Federal Benefit Protections

Bank garnishments must comply with federal regulations under 31 CFR Part 212. When the bank receives your adverse claim notice, it must run an automated review covering the two months before the garnishment order arrived.

Any federal benefits deposited during that two-month window are fully protected:

• Social Security
• Supplemental Security Income (SSI)
• Veterans Affairs (VA) benefits
• Railroad Retirement benefits

The debtor retains full access to the protected amount. Only funds exceeding the protected federal benefit total are subject to the hold and turnover order.

The bank automatically protects qualifying direct-deposited federal benefits from the two months before the garnishment order. If the account contains older benefit deposits outside that lookback, the debtor may need to claim and document the exemption for those funds.

Practical Considerations

Bank garnishment works best when you know where the debtor banks. A proceedings supplemental hearing is the primary way to discover this — the debtor must disclose bank accounts under oath. Public records (checks written to you, prior payment records) can also point to specific institutions.

One important detail: if multiple garnishment orders hit the same account, Indiana follows a priority system based on the date and time of service. If another creditor got there first, their order must be fully satisfied before yours receives anything.

Filing fees and service charges you advance are recoverable only when allowed as court costs.

For the full bank garnishment procedure — including the forms, hearing timeline, and how it fits alongside wage garnishment and judgment liens — the Collecting a Small Claims Judgment in Indiana guide has the complete walkthrough.

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