Once you have a court judgment against a debtor, the next step is often to enforce that judgment and collect what you are owed. One of the most effective tools in this process is a bank levy. This powerful legal mechanism allows creditors to seize funds directly from a debtor’s bank account, providing a swift way to recover unpaid debts.

In this blog post, we’ll explain what a bank levy is, how it works, and how a judgment collection attorney can assist you in using this tool effectively.

What Is a Bank Levy?

A bank levy is a legal action authorized by a court judgment that instructs a financial institution to freeze and surrender funds from a debtor’s bank account to satisfy a debt. Unlike wage garnishment, which comes from ongoing income, a bank levy targets the debtor’s existing funds on deposit.

How Does a Bank Levy Work?

Step 1: Obtain a Court Judgment

You must first have a valid court judgment confirming that the debtor owes you money.

Step 2: Identify the Debtor’s Bank Accounts

You’ll need to know where the debtor holds their bank accounts. This can sometimes be discovered through the debtor’s disclosures or through legal discovery procedures.

Step 3: Request a Writ of Execution or Levy

You file a request with the court for a writ of execution or a levy against the debtor’s bank account.

Step 4: Serve the Bank

The writ is served to the bank where the debtor holds accounts. The bank is then legally required to freeze and surrender the funds, up to the amount owed.

Step 5: Funds Are Seized and Paid to Creditor

The bank freezes the account and transfers the available funds (up to the amount owed) to the creditor or the court.

What Are the Advantages of a Bank Levy?

• Immediate access to funds: Unlike wage garnishments, which take time to collect through ongoing payroll deductions, levies can seize available funds quickly.
• Effective against reluctant debtors: Debtors can hide income, but it’s harder to hide funds already in a bank account.
• Broad coverage: Can be used against checking, savings, and other deposit accounts.

Are There Any Limitations or Exemptions?

Yes, certain types of funds are typically exempt from levy, such as:

• Social Security and other government benefits (usually protected by federal law)
• Retirement account funds (depending on the type and state laws)
• Certain small amounts in the account to cover essential expenses

Also, banks are required to notify the debtor when their account is levied, giving them a chance to contest the levy.

How a Judgment Collection Attorney Can Help

Navigating bank levies requires careful legal knowledge to ensure compliance with all applicable laws and procedures. A judgment collection attorney can:

• Help locate the debtor’s bank accounts through legal discovery
• Prepare and file the necessary court documents to initiate a levy
• Advise on exemptions to protect you from legal challenges
• Represent you if the debtor contests the levy
• Coordinate simultaneous enforcement methods for better results

What to Do if the Debtor Moves or Changes Banks

Debtors sometimes move funds or change banks to avoid levy. To combat this:

• Act quickly once a judgment is obtained
• Use discovery to identify new accounts
• Work with your attorney to monitor and respond to debtor actions

Conclusion

A bank levy is a powerful, direct tool to enforce a judgment and recover owed money. It provides quicker access to existing funds than many other collection methods and can be instrumental when the debtor is unwilling to pay.

If you have a judgment and need to recover funds efficiently, consult a judgment collection attorney. Their expertise can ensure the levy process goes smoothly and maximize your chances of successful collection. We recommend Judgement Collection Attorney.