How to Stop Bank Levy?
Stop Bank Levy – You receive an unpleasant surprise, either notice from your Bank that your bank account – containing the money you need to live on – has been frozen by creditor or WORSE, checks bounce, or NSF notices begin. A judgment creditor has gotten a court judgment against you for money and is seeking to collect.
If a bank levy is anticipated or just happened, you can file a bankruptcy to stop the bank levy in its tracks! The day you file a bankruptcy, a Court order called the “automatic stay” goes into effect. The automatic stay prevents ALL creditors from collecting on their debt, especially through a garnishment or bank levy.
What is Bank Levy?
A bank levy is the process whereby a creditor can freeze money in your bank account and ultimately take it to pay their debt. The creditor must first obtain a judgment in court. The creditor then files appropriate papers with the court to serve upon your bank to freeze your accounts.
A judgment debtor, the person who owes the money, has limited options to oppose a bank levy. There are circumstances when a mistake has been made and a levy is upon someone else’s account. This can be corrected by the person whose bank account was levied providing documentation to the authorities to show that the judgment was not against them. But what do you do If it is your debt? If this is your legitimate debt, then you are limited to two basic options: file a claim of exemption stating that the money should not be taken or taken in a reduced amount or file a bankruptcy.
A claim of exemption allows a judgment creditor to protect their earnings necessary for living. Usually a judgment debtor in California can protect 75% earned wages, or the proceeds from private pension or profit-sharing for retirement purposes, or public pensions. The judgment debtor would file papers with the court usually through the levying sheriff, to claim their exemption. The judgment creditor who is taking the money from the bank, can contest this and set the matter for hearing before Judge.
A judgment debtor may also deal with the levying judgment creditor by filing a bankruptcy. Frequently money judgments on collection matters are discharged in bankruptcy. However, the person or couple who are seeking advice are in a unique situation and considering dealing with judgments in bankruptcy should be done in the form of a consultation with an experienced bankruptcy attorney. A bankruptcy also offers the possibility of presenting a global response that would address not just the judgment which levied on your account but also any other basic money judgments and general creditors.
There are two different types of bankruptcy: Chapter 7 which is a general bankruptcy to discharge unsecured debt, and a Chapter 13 which is a reorganization/to discharge general unsecured debt repayment bankruptcy. Filing a bankruptcy involves careful financial disclosures and presenting proof that the filer qualifies for the relief sought.
Getting money judgment against you for unpaid debt is usually not an isolated circumstance. Often it represents one of many debt problems the person or household is going through. While an exemption under state law may provide temporary relief – it would be wise to explore options that could resolve most, perhaps all, this was anything the doors stores and unsecured debt issues
Did Your Bank Account Get Levied? Get Help. Call Michael Now
A bank levy on your checking or savings account is a horrible experience – you feel violated at your core. Many of our clients who call us to file bankruptcy when they learn their bank account was levied, were already deep in debt and this bank levy was the awful experience that forced them to consider doing something proactive to stop their circumstances from worsening. A bank levy takes away your control from paying other debts, including rent, mortgage, car loan payments, utilities creating a bigger mess. It also can wreak havoc on your credit rating.
If you have a bank levy on your checking or savings accounts or are having your wages garnished, you should contact an Orange County bankruptcy attorney to find out your legal rights against this raid on your cash, invasion of your personal control over your finances, and get the financial restart you most likely need.
Call for A Free Consultation (714) 252-6268 Today!