Lawyer Rich Hutton told a judge the 27-year-old actress currently does not have the mental capacity to understand the legal proceedings, TMZ reported.
The judge transferred the matter to a mental health court, which will conduct a hearing to determine Bynes' mental competency, the celebrity news website said.
Bynes has been hospitalized for an undisclosed mental illness since July.
The former child star was placed on an involuntary psychiatric hold after she allegedly caused a disturbance when she tried to break into a retirement community in her hometown of Thousand Oaks, Calif.
The following night, she allegedly set a small fire in a driveway, which led to police involvement and her eventual hospitalization.
The actress is known for her work on TV's "What I Like About You" and "The Amanda Show," as well as in the films "Hairspray" and "What a Girl Wants." Her most recent major screen credit was a supporting role in 2010's "Easy A."
Her once-bright career has been eclipsed in recent years by her bizarre Twitter rants and frequent brushes with the law.