When you’re in debt and a collection agency is nipping at your heels, it’s a tumultuous time in your life that could lead to bank or wage garnishment — if you aren’t proactive. And as much as you’d like it to, you know the problem isn’t going away on its own. But are you obligated to pay a debt collection agency? Let’s look at that – and more. The Issue It’s like a horror movie come to life: you’re on vacation, say, and you go to withdraw funds to take a nice day cruise with a date, only to discover that your bank account has been wiped out by one of your creditors. Yikes. You know you owe money, but you’re incredulous that that this is allowed, or even legal. And in many cases, it is, although there are ways to head such a drastic action off. And you may be consoled to know that a whopping 80 percent of U.S. residents owe some debt, some of whom will find themselves in your shoes. That’s four of every five Americans. When it is Possible for my Bank Account to be Garnished? Be honest: you know when you owe money, and unless you avoid reading or listening to correspondences from creditors, you likely know that the day will come when said creditors will take severe action. But don’t panic. Most creditors cannot just willy-nilly clean out your account. Usually, the creditor must first sue you then win a judgement against you. This is the point at which you know for sure that this situation is serious. The good news is that you can still do something about it before your bank account can be garnishedor frozen. To wit, you can contact the debt collectors that are handling your debt and make affordable payment arrangements, which will be filed with the court. Usually, those payments will be made on a reduced debt amount. Is it Legal for Creditors to Completely Wipe You Out? It really depends on your state of residence. For instance, many states prohibit the garnishment of retirement accounts or social security payments, or the total emptying of any of your accounts. In a few states, garnishment is prohibited altogether. So, it may be a good idea for you to see what the laws are for where you live regarding debt collectors. Can My Bank Account be Garnished More Than Once? In general, yes. For as long as you still owe, a creditor can continue to seek bank account garnishment. So, it would behoove you to nix all automatic deposits to accounts that may be hit with garnishment or bank levy. What Else Can I Do to Stop Bank Garnishment? Dispute a frozen account right away. While the account will remain frozen while the case is being investigated, the creditor won’t get your cash if you don’t owe the money or if your state’s statute of limitations has rendered the debt uncollectible. Creditors also can’t take your money if your wages are already being garnished or if account funds are exempt under federal or state law. So, Am I Obligated to Pay a Collection Agency? If you owe the debt, you usually want to do so to avoid a lot of hassle and, ultimately, some of the worst-case scenarios such as bank garnishment. And remember, you may be able to negotiate with the agency to erase your debt for a markedly lower amount than you owe. On the other hand, you may not want to pay a collection agency if you have no income or property that can be garnished or seized, or if not paying is part of your strategy to settle your debt. You also may want to hold off if the collection agency can’t prove debt ownership, or, as we’ve mentioned, the statute of limitations in your state has expired. Your obligation to pay a debt collection agency ultimately depends on a variety of factors, including where you live and your long-term financial goals.