Using an out-of-state bank

[howdidithappen]

Just wondering that if you opened an account in a bank that does not have offices in the state you reside, if the sheriff can serve papers on that out-of-state bank?

[HHM]

If a bank is doing business in your state, all states require that the bank have an agent for service of process. So, strictly speaking, the sheriff can serve an out of state bank.

If the bank is truly a local, out of state bank, i.e., you moved to a new state, but kept your old bank (although why you would do that is curious), I suppose the sheriff would not be able to serve that bank.

But if you are considering opening an account in a different state to avoid bank account garnishment, unless it's an online bank, the bank generally will not allow an account if you live in state in which it is not registered to do business (banks are highly regulated).

As a practical matter, the creditor and sheriff prefer to serve bank branches as the response is more immediate.

[howdidithappen]

No, the bank is not doing business in the State. So are you saying if you're employed in a State other than the one you reside (which is quite common in large metropolitan areas), you can open an account in a state other than the one you reside or, the one that the writ was issued. Are there regulations that you cannot open an account in a state that you do not live? There still are some small banks that only have branches, offices, etc. in one state. Is there reciprocity that the other State (where the bank is located) must obey the Court Order from the state? E.g. one works in New York but lives in Connecticut. The Writ or Court Order is from Connecticut.

[HHM]

Banks are regulated on either a state or national level (i.e. the Federal Reserve) and there is overlap.

So let's see if we can break this down...

You live in Conn...but work in NY.
Since you are a resiendeny of Conn, you can only be sued in Conn. (there are some caveats to that claim, but generally, collection lawsuits must be brought where the defendant resides...or at least their last known address)
Thus, the judgment is issued in Conn.

So what you are wondering is...can you have an account in a NY bank that is somehow not registered to do business in Conn.

Is that correct?

[HHM]

As a general matter...

A judgment is only good within the state it is issued. Thus, if a creditor needs to pursue a debtor, or a debtor's assets to another state, they first must get that judgment recognized in that state. This process is known as domesticating the judgment. Domesticating a judgment is really just a matter of completing some paper work and paying fee...but does take a little time and effort. Once the process of domestication is complete, the creditor can employ whatever collection efforts the state allows.

So, to answer your basic question, the creditor can ultimately pursue your assets even if they are out of state, but doing so takes the creditor a little more time, effort, and expense.

I would imagine between states with very close economic ties and large cross border populations, i.e. Conn-NY, Maryland-Virginia...the process of domestication is quite streamlined.

[GoingDown]

Using an out of state bank or an online bank is really more trouble than it's worth.

Start using cash and money orders to pay for everything until you can file BK.

[technoreid1]

What if you move to England?

thanks, techno

As a general matter...

A judgment is only good within the state it is issued. Thus, if a creditor needs to pursue a debtor, or a debtor's assets to another state, they first must get that judgment recognized in that state. This process is known as domesticating the judgment. Domesticating a judgment is really just a matter of completing some paper work and paying fee...but does take a little time and effort. Once the process of domestication is complete, the creditor can employ whatever collection efforts the state allows.

So, to answer your basic question, the creditor can ultimately pursue your assets even if they are out of state, but doing so takes the creditor a little more time, effort, and expense.

I would imagine between states with very close economic ties and large cross border populations, i.e. Conn-NY, Maryland-Virginia...the process of domestication is quite streamlined.

[HHM]

Although there is international reciprocity, in the average consumer case, it is rare for a creditor to try and enforce a judgment overseas (Canada being the exception).

[treehugger1]

There are plenty of checkless banking accounts available. Many require direct deposits and are web-based. I opened an account with a major US bank that does not have any branch or office in my state. In fact, the bank address listed on my account is 3000 miles away on the other side of the country. There didn't seem to be any issue with me opening an account in a state where they have no branches. They are licensed in my state as I checked the state consumer website for licensed/registered financial institutions. I needed the ability to pay some bills online, but I now make it a point to not pay any unsecured creditors using any bank account (I send money orders from Walmart.) I direct deposit 30% of my check into this account, direct deposit 20% of my check into a debit card account, and receive the remainder of my paycheck as a paper check.

You can also open a brokerage account that includes checking and ACH deposit/payment options.

There are several debit card options also available. These can get expensive.

All of these options can be harder to track than some folks would have you believe. However, if you are subjected to a debtor examination, you will have to give up your account numbers under oath. In such a situation, you should be prepared to withdraw any funds on a moments notice.

Be aware that many (almost all) banking institutes will pull a chexsystems report and this will show on the report to anyone who can access chexsystems.

Be creative and do your own research.

I am not provding advice here, just sharing opinions and/or experiences.

[HHM]

They are licensed in my state as I checked the state consumer website for licensed/registered financial institutions

And that is the key for creditors...if the financial institution is licensed in your state, then they have a an agent for service of process in the state and the sheriff or process server need only mail the Writ to that agent.

But as treehugger points out, the issue is not whether the sheriff will be able to serve or not, it is whether the creditor is going to go to the effort to identify the account.

[jp2861]

Using an out of state bank or an online bank is really more trouble than it's worth.

Start using cash and money orders to pay for everything until you can file BK.

I've been using online banks for over 5 years and there's no difference. Actually, most banks are all online anyway when you think about it. Unless someone has checks to cash regularly there's really no reason to not do everything online.

For someone worried about their account getting hit an online bank is a great way to go. Much much better than living on paper checks and cash.