Bank Garnishment of a Payroll Account (Philippines)

(When and how your banked salary can be frozen or taken; lawful limits, exemptions, defenses, and remedies.) Not legal advice.

1) Quick definitions (so we’re on the same page)

Garnishment: a sheriff (or government collector) freezes money owed to the debtor by a third person (the garnishee). For bank deposits, the bank is the garnishee.
Attachment/Execution: court processes used to secure or satisfy a money judgment. Garnishment of a deposit is a form of levy by garnishment.
Payroll account: your bank account used to receive wages/salary (often via employer payroll credit).

2) Who can freeze a bank account (and when)

A) Private creditors (banks, lenders, persons)

Need a court case, a final money judgment, and a writ of execution (or a writ of preliminary attachment, with a bond) served on the bank.
Upon service, the bank must hold funds up to the writ amount and report to court (the bank becomes a “forced intervenor”). Disbursements after service risk bank liability.

B) Government for taxes (BIR)

May issue a Warrant of Garnishment administratively (no court case) to collect assessed, delinquent taxes. Banks must comply. You can contest the assessment/collection through the tax remedies, but the freeze can happen fast.

C) Family support / special laws

Courts may direct salary withholding/garnishment for support (Family Courts), VAWC protective relief, or restitution in limited statutes. These can reach wages at source (your employer) and/or deposits.

3) Big protection: wages are privileged (but tracing matters)

Civil Code: The wage of a laborer/employee is not subject to attachment or execution, except to answer for debts for food, shelter, clothing, and medical attendance.
Labor Code: Bars most wage deductions and protects take-home pay. Employers generally cannot let a private creditor garnish your wages at source, absent a lawful basis.

Crucial nuance: Once wages hit a bank account, courts look at tracing. If you can clearly show the frozen balance is current wages (and not savings/investments), many courts will respect the exemption and lift the freeze to that extent. If the money is commingled (bonuses, other deposits, transfers) or the account looks like a general savings account, you may lose the wage shield on the mixed balance.

Practical tip: Keep your payroll account clean—salary credits in, basic expenses out, no large non-salary inflows—so the balance is readily provable as wages.

4) What cannot be garnished (or is harder to reach)

Wages/salaries (subject to the limited exceptions above) while traceable as such in your deposit.
Foreign-currency deposits: generally exempt from attachment/garnishment under the Foreign Currency Deposit law (with narrow statutory/jurisprudential exceptions).
GSIS/SSS pensions and benefits: typically exempt from execution, attachment, or garnishment.
Trust/escrow funds where you are not the beneficial owner (e.g., employer-owned payroll master accounts).

Exemptions can be waived or lost by commingling, converting to investments/time deposits, or transferring to instruments not obviously “wages.”

5) What can be reached

Non-exempt bank deposits in your name (peso savings/current, time deposits).
Joint accounts: courts may presume equal shares and allow garnishment of the debtor’s presumptive share, but banks often freeze the whole account pending court clarification—prompt motions are vital.
**Deposits with your creditor-bank: the bank can also invoke set-off/compensation (see §10).

6) The process (private creditor)

Money judgment becomes final; court issues writ of execution.
Sheriff serves Notice of Garnishment on the bank branch or legal division.
Bank freezes up to the amount and reports to court.
Court orders turnover (or releases excess) after due proceedings.
You may file a Motion to Quash/Modify Garnishment or a Third-Party Claim (see §8) to assert exemptions/errors.

7) Special case: BIR garnishment (taxes)

BIR serves a Warrant of Garnishment on your bank for assessed taxes.
Bank freezes and turns over funds as directed.
Remedies: Protest/appeal the assessment within strict deadlines; request lifting (e.g., hardship, no finality), installment/compromise, or partial release for basic living/medical needs. Move fast—tax procedure is deadline-driven.

8) Defenses & remedies you can use (payroll account focus)

A) Motion to Quash / Lift Garnishment (Wages Exemption)

Argue deposit is exempt wages. Attach:
- Employment certificate & payslips;
- Bank statements showing salary credits (identifiable employer deposits) and minimal/non-salary inflows;
- Affidavit tracing the frozen balance to recent wages;
- Cite the wage exemption and the rule against garnishing wages at source.
Ask court to limit garnishment to non-wage amounts (if any) and release the rest.

B) Excess/irregular garnishment

If the freeze exceeds the writ amount, hits clearly exempt funds (e.g., SSS pension), or violates procedural due process, seek immediate partial lifting.

C) Third-party claim

If funds are not yours (e.g., employer-owned payroll master account, trust funds), the real owner files a third-party claim with proof of ownership.

D) Installment/compromise (post-judgment)

Offer a payment plan; ask the court/creditor to release part of the payroll account to cover basic living while you pay on schedule.

E) Appeal does not stay execution (generally)

Unless you post a supersedeas bond or obtain a stay, execution may proceed. Don’t assume an appeal will unfreeze your account.

9) Evidence that wins a payroll-exemption contest

Statements highlighting employer-named credits (e.g., “ABC CORP PAYROLL”), credit dates, and running balance proving the frozen amount sits within recent wage credits.
No large non-salary inflows (or clear segregation if any).
Consistent ATM withdrawals/bill pays matching living expenses (supports that this is a payroll wallet, not a savings hoard).
Affidavits from employer/payroll provider confirming the nature of deposits.

10) Set-off by your own bank (no sheriff involved)

Concept: Under compensation rules, your bank can offset your deposit against your matured, due debt to the same bank (e.g., credit card, personal loan) without a court case, if the contract allows (it usually does).
Limits/defenses:
- Debt must be due, liquidated, demandable;
- Deposit and debt must be in the same right (your personal account vs. corporate debt, etc.);
- You can argue wage-exemption policy and equity if the account is a pure payroll wallet and set-off is oppressive—some courts curb abusive offsets, especially where it defeats basic subsistence.
- Foreign-currency deposit set-off is constrained by its special protection.
Prevention: Keep payroll at a different bank than your lender; avoid commingling payroll with loan proceeds or business cash.

11) Joint, “in-trust-for,” and employer payroll structures

Joint accounts: Expect a freeze of the whole until the court fixes shares; co-depositor should promptly assert his/her share.
“ITF” (in trust for) accounts: Funds are generally the beneficiary’s; show documents to resist levy for the trustee-debtor’s personal debt.
Employer-owned payroll master: If the frozen account turns out to be the employer’s account (not yours), employer files a third-party claim—your personal creditors can’t levy employer’s money.

12) What if the account is already frozen? (Do this.)

Get the papers: writ/warrant, bank notice, case title/number.
Pull statements for the last 6–12 months; mark salary credits.
Gather employment proof: COE, payslips, payroll advice.
File (ASAP): Motion to Quash/Lift (wage exemption; excess; wrong party) with evidence.
Serve copies on creditor and bank; ask for urgent hearing or ex-parte partial release for immediate subsistence.
Parallel track: Explore installment/compromise or bond to release the levy.
For BIR: File the appropriate administrative request/appeal (collection due process, lifting for hardship) within deadlines.

13) Preventive hygiene for employees

Keep a dedicated payroll account (no side deposits; avoid commingling).
Withdraw/transfer essential living money promptly; keep only a modest buffer.
Park savings in a separate bank from your creditor-bank.
Avoid making the payroll account a time deposit or investment wallet.
Retain statements and payslips—you’ll need them to prove wage character.

14) For employers (so you don’t get dragged)

Don’t honor private wage garnishment demands absent lawful order (support/VAWC, etc.).
Respond to sheriff writs properly (if directed at employer), invoking wage exemptions where appropriate.
Maintain clear records of payroll credits and account ownership to help employees assert exemptions if needed.

15) Templates (short, adaptable)

A) Motion to Lift/Quash Bank Garnishment (Payroll Exemption)

Grounds: Funds restrained are wages exempt from execution; garnishment is over-broad/exceeds writ; due process defects. Attachments: COE; payslips; bank statements highlighting employer credits; affidavit of tracing; proposed order releasing ₱[amount] as exempt wages and limiting levy to non-wage funds, if any.

B) Bank Letter (Payroll Character Certification Request to Employer)

Kindly issue a letter on company letterhead certifying that deposits labeled [PAYROLL CREDIT/COMPANY NAME] to [Bank/Acct No.] are salary/wage payments to [Employee], with typical credit dates and descriptors, for submission to court re: garnishment.

16) FAQs

Can a creditor garnish my salary directly from my employer? Generally no for private debts, because wages are protected. Courts can order withholding for support and certain special cases.

My payroll ATM was frozen. Is all of it untouchable? Only the portion you can prove is wages. Non-wage inflows or commingled balances are usually not exempt.

The freezing bank is also my credit-card bank. Can they take the money? They might invoke set-off under your card/deposit contracts. Keep payroll at a different bank; contest oppressive offsets.

What about tax garnishment? BIR can freeze with a warrant. You must pursue tax remedies (protest/appeal, lifting/compromise). Wage-hardship arguments may support partial releases, but act immediately.

Are foreign-currency payroll credits safer? Foreign currency deposits enjoy statutory protection against garnishment, but details matter (type of account, bank, jurisdiction). Don’t rely on this without counsel.

17) Takeaways

Wages are protected, but you must trace them in your bank account to keep the protection.
Private creditors need a court writ; BIR can garnish administratively for taxes.
Move fast with a motion to lift/limit and solid payroll evidence.
Segregate payroll from savings and from your creditor-bank to reduce risk.
When in doubt (especially with tax or joint-account issues), get counsel quickly—timelines are tight and the first filings matter most.