one two F First, let’s review some of the basics. Garnishment is a remedy for judgment holders (creditors) under Colorado law. While there are five different types of garnishments available to a judgment creditor in Colorado, including continuing wage garnishment, this article will focus on a judgment holder (the judgment creditor) obtaining a Writ of Garnishment in Aid of Attachment. This type of writ would seek to attach a judgment debtor’s account or accounts held at a bank to satisfy the judgment creditor’s judgment. The applicable rule in Colorado is noted as Colorado Rule of Civil Procedure 103. It outlines the process for a judgment creditor to obtain and serve a Writ of Garnishment on a judgment debtor’s non-exempt personal property (which includes most deposit accounts). The process must be followed precisely by all parties and normally require legal oversight of the garnishee bank’s process. The Writ of Garnishment’s full name under the Colorado Rules is a Writ of Garnishment with Notice of Exemption and Pending Levy (if the judgment debtor is an individual), or simply, a Writ with Notice. At the same time that the Writ with Notice is served on the garnishee bank, the judgment creditor also serves the judgment debtor with a copy of the Writ and a blank copy of a Claim of Exemption form. The bank should have printed response forms that show the time period to answer and the account type exemptions available to the judgment debtor. The bank is not required to defend any claim that a third party may assert in the judgment of the debtor/ customer’s property, but the bank must note this in its answer if it has knowledge of a third-party claim. The Commonly Asked Questions About Writs of Garnishment of Bank Accounts BY ANNA ADAMS AND JUDITH LAJOIE Snell & Wilmer, LLP bank may also claim a right of setoff if it has contractual claims against the customer. An example of this may be that the judgment violates a loan covenant. A setoff right may exhaust the Writ with Notice which would show in the form answer provided by the garnishee bank. If a balance remains after the setoff, that balance remains available to the judgment creditor. The exemption process is entirely the judgment debtor/ customer’s responsibility. The bank is not obligated to assert exemptions on its customer’s behalf. Some FAQs From Bank Clients 1. When does the exemption process start? • Exemptions may be claimed when the judgment debtor/customer is served with the Writ with Notice. • The judgment debtor/customer has 14 days from service of the Writ with Notice to claim any exemptions. 2. When is the bank required to take initial action on the Writ with Notice, and what is the scope of the bank’s due diligence? • The garnishee bank is not required to take any action regarding the availability of any exemptions unless the judgment debtor/customer files a Notice of Exemption with the clerk of court and the garnishee bank receives it. The bank just needs to answer the Writ with Notice in the 10-day prescribed time period and show the funds that the bank has on deposit that would be responsive to the Writ with Notice, including whether a setoff right is available to the garnishee bank (in which case the bank would report no funds). The bank www.coloradobankers.org 24
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