Bank levies are used by judgment creditors to collect money allegedly owed to them by debtors. If you’ve been sued by a creditor and a court judgment has been obtained against you, a bank levy is likely not far behind. You may be wondering what steps you should take next.
The Fullman Firm knows that debt collections and bank levies can be stressful. We’re here to offer hope by defending the rights of debtors and helping them move on with their lives.
What Is A Bank Levy?
If a creditor obtains a court judgment against you, there are a number of methods that can be used to collect the funds. One of those is the bank levy. The levy removes funds from a bank account held by the debtor in order to satisfy the judgment.
While the creditor has to do some work to determine where the debtor banks, this is usually not difficult. Simply hoping the creditor won’t find out where you bank will almost certainly not stop the levy from being processed.
What Are The Steps Involved In A Bank Levy?
The judgment creditor will obtain what’s known as a writ of execution from the court. This document will contain the amount of money to be withdrawn from the debtor’s account. The amount usually includes the debt, attorney’s fees, court costs, and post-judgment interest.
The sheriff delivers the writ to your bank and seizes the stated amount from your account. Although the writ may only be used once, the judgment creditor may obtain multiple writs at multiple banks until they get their hands on all the money owed. Once the money is taken from the bank, it is forwarded to the creditor. The debtor will receive a notice of levy stating which account(s) have been levied.
How Can I Stop A Bank Levy?
If you don’t take action, there is no limit to the amount of money a judgment creditor can take from your bank account. Fortunately, the law allows you to file a claim of exemptions to exclude certain funds in your bank account from being seized.
When a creditor places a levy on your bank account, the account will be frozen and the bank will hold the funds for ten days. During this period, you should file the claim of exemptions. Using the claim, you can protect the following from a levy:
- 75% of income earned from employment up to 30 days before the levy
- Social Security benefits
- Veterans’ benefits
- Workers’ compensation
- Supplemental Security Income
- Disability benefits
- Unemployment benefits
- Distributions from retirement plans
- Public retirement benefits
- Student loans
California law also allows debtors to protect money that may be necessary to provide for themselves and their families. However, it is imperative that you act quickly. If you fail to take the necessary steps to claim an exemption, the money will be taken and you won’t get it back.
Steps To Claim An Exemption
When your bank account is levied, you should receive the following documents:
- Copy of the writ of execution
- Notice of levy
- List of exemptions
A claim of exemptions form will have to be returned to the sheriff or other levying officer. You should also complete a financial statement form if you believe that any levied money is necessary to support yourself or your family.
The judgment creditor will either agree with your claim of exemptions and return the funds, or set a hearing before a judge to dispute your claim.
What Can I Expect At A Hearing?
A hearing may be set to determine whether your claim of exemptions is valid. If this happens, the judge will review your claim and decide whether it is acceptable under law. The judge may grant the exemptions and order the seized funds returned to you, or can deny the claim of exemptions and allow the creditor’s levy to stand.
It’s important to know that even if the claim of exemptions is granted, it only applies to the specific funds that were levied. The creditor can still levy additional bank accounts and in fact often does. Creditors know that debtors tend to have more than one bank account, and that any single one likely won’t satisfy the judgment amount. They therefore latch onto as many as they can find, meaning you could have multiple fights on your hands.
Having your claim of exemptions granted also does not mean the judgment is not valid. In addition to levies, the judgment creditor can use other available means to collect on the debt.
How Can The Fullman Firm Help Me?
If you’ve found out that your bank account has been levied, you need to take swift action. It’s up to you to claim exemptions; the judgment creditor won’t do it for you. The Fullman Firm can review your levy, explain your legal options, and help you file and serve your claim of exemptions in a timely manner. We can also defend you in any hearing demanded by the judgment creditor.
Judgment creditors are notorious for ignoring valid claims of exemptions, even on funds that are clearly protected under state law. You may have a perfectly legitimate exemption that you can claim, but that alone won’t stop the creditor from levying your account. Judgment creditors rely on debtors not knowing their rights, and they gamble that most of them won’t object or even respond to collection actions. That’s why you need the dedication that our debt settlement firm brings to the table.
The Fullman Firm understands California’s debt protection laws and we can craft a solution that fits your needs. We’ve had experience challenging bank levies and defending the rights of our clients. Give us a call today to find out how we can prevent your hard-earned money from being taken from you.