When a debtor owes a creditor money, there are many ways in which a creditor can collect what they owe. One of the most common methods is through a bank levy; however, a single levy does not always collect the full amount of a loan. At the Law Offices of Andrew Ritholz, our California bank levy lawyers can assist in the collection of unpaid debt through the use of bank levies and other methods. To learn more, call or contact our Los Angeles offices today to schedule a case consultation.
What is a Bank Levy?
A bank levy is a court order that allows a creditor to instruct a bank or other financial institution to withdraw funds from a debtor’s account without their permission in order to apply those funds towards an outstanding debt. Once a creditor obtains a monetary judgment from a California court, a bank levy can occur within a week or two of the judgment as soon as the creditor obtains a writ of execution from the court that it can send to the bank to notify them of the judgment.
A bank levy is one of many different methods of debt collection in California, with other methods including the following:
- Wage garnishment,
- Real property and personal property liens, and
- Forced sale of property (forfeiture or sheriff’s sales)
Can a Levy Be Placed More Than Once?
There are many times when a debtor does not have enough funds in a bank account to cover the entirety of a debt to a creditor. When a debt is not paid through a single bank levy, a creditor is allowed to place more than one bank levy on an account or on multiple accounts of a single debtor. However, a creditor must go back to court and obtain permission through additional writs of execution in order to pursue additional bank levies against a debtor. An experienced debt collection lawyer like those at the Law Offices of Andrew Ritholz can assist with the legal process of obtaining permission to enact multiple levies in order to fully collect on a debt.
Funds Exempt From Bank Levies
It is also important to note that certain funds are exempt from bank levies in California. Funds that cannot be accessed by a writ of execution for a bank levy include Social Security payments, retirement pension funds, Supplemental Security Income (SSI), disability insurance payments, veterans’ benefits, unemployment benefits, and workers’ compensation payments. Bank levies are also capped at 25% of earnings paid within thirty days of the issuance of the bank levy. Knowledgeable debt collection attorneys can help sort through a debtor’s income to help determine what can be collected through a bank levy and whether additional levies may be necessary in order to collect the entirety of the debt.
Talk to the Law Offices of Andrew Ritholz
Are you in need of debt collection assistance in the Los Angeles area? If so, the dedicated debt collection lawyers at the Law Offices of Andrew Ritholz can assist with the filing of bank levies and other collection methods. To learn more about your legal options, call or contact our office today.
By Andrew Ritholz | Posted on February 21, 2022
FAQs
A bank levy is not a one-time event. A creditor can request a bank levy as many times as needed until the debt has been satisfied.
Can you be garnished twice for the same debt? ›
The short answer is no, you should not have your wages garnished for the same thing twice.
How do you stop a levy on your bank account? ›
To remove or lift the levy, you must either pay the debt in full or show that the funds in the account are exempt from the levy. Similar to wage garnishment exemptions, certain types of income in bank accounts may be exempt or excepted from levy.
How long does a levy last on a bank account? ›
For your bank levy to go away, you'll typically need to repay the debt you owe, work out a settlement on the debt or make payment arrangements that satisfy the creditor. Regardless of the type of debt, the bank usually has to wait 21 days after a levy is received before surrendering your money.
How long can a creditor put a hold on your bank account? ›
In California, unpaid judgments are collectible for up to 10 years.
How many times can a bank account be garnished? ›
There are many times when a debtor does not have enough funds in a bank account to cover the entirety of a debt to a creditor. When a debt is not paid through a single bank levy, a creditor is allowed to place more than one bank levy on an account or on multiple accounts of a single debtor.
Can you stop a garnishment once it has been started? ›
You can stop a garnishment by: Paying off the debt in full. Filing an objection to the garnishment with the court if you have legal basis, such debt was a result of fraud or identity theft. Filing for court protection and debt resolution through Chapter 13 or Chapter 7 bankruptcy.
Can I open another bank account if mine was levied? ›
While your levied account is frozen, you can open a new one. Be sure to move any automatic bill payments that you've set up to the new account so that you don't miss any payments and fall deeper into debt.
Is a levy a one-time thing? ›
Bank levies are one time actions
If you want to try to take money again you'll need to do another levy.
What states do not allow bank levy? ›
Bank garnishment is legal in all 50 states. However, four states prohibit wage garnishment for consumer debts. According to Debt.org, those states are Texas, South Carolina, Pennsylvania, and North Carolina.
Yes, a debt collector can take money that you owe them directly from your bank account, but they have to win a lawsuit first. This is known as garnishing. The debt collector would warn you before they begin a lawsuit.
Can I deposit money after a levy? ›
The date and time of delivery of the levy is the time when the levy is considered to have been made. In the case of a bank levy, funds in the account are frozen as of the date and time the levy is received. Normally, the levy does not affect funds you add to your bank account after the date of the levy.
How can I protect myself from bank levy? ›
What Are My Options To Avoid A Bank Levy?
- Workers' compensation benefits.
- Social security income.
- Three-quarters of the income earned from your job in the 30 days before the levy.
- Veterans' benefits.
- Disability benefits.
- Supplemental Security Income (SSI)
- Student Loans.
- Unemployment payments.
You may appeal before or after the IRS places a levy on your wages, bank account, or other property. After the levy proceeds have been sent to the IRS, you may file a claim to have them returned to you. You may also appeal the denial by the IRS of your request to have levied property returned to you.
What type of bank account cannot be garnished? ›
Retirement accounts like 401ks and IRAs have special protection from creditors and debt collectors. Under federal law, 401ks and other ERISA-qualified plans cannot be garnished by creditors. IRAs also receive protection up to $1 million (adjusted for inflation) under federal bankruptcy law.
Can debt collectors see your bank account balance? ›
Collection agencies can access your bank account, but only after a court judgment. A judgment, which typically follows a lawsuit, may permit a bank account or wage garnishment, meaning the collector can take money directly out of your account or from your wages to pay off your debt.
Can 2 collection agencies try to collect on same debt? ›
It's not uncommon for two companies to be trying to collect it at one time, but you need to be very careful to only pay the company who are currently tasked with collecting the debt.
How many times can you be sued for the same debt? ›
It's generally not permissible for a creditor to obtain two judgments against a debtor for the same debt. However, due to errors in the collection process, such as lost paperwork or database discrepancies, a debtor might face two lawsuits for the same account.
Can a debt be charged off twice? ›
Thus, when an account is charged off, two companies can report the debt at the same time. One reports that it is currently owed the balance, and the other reports that the account was charged off and sold. Importantly, the balance that was charged off should not be reported twice.
