topic Re: Levy bank account in Rebuilding Your Credit

Levy bank account

Johnny35 — Wed, 10 Jan 2024 11:37:13 GMT

Could a creditor freeze your bank account if you only have $1,000-$2,000. Or do they need to leave a certain amount unfrozen for you to be able to use?

Re: Levy bank account

JoeRockhead — Wed, 10 Jan 2024 12:34:25 GMT

If you're in a state that allows a bank levy, yes the account can be frozen, or levied. This is a court ordered action and the result of a judgement in the creditor's favor (have you gotten a judgement against you?). Worst case would be when this happens the account is frozen until the levy is fully satisfied.

If for example you have $2000 in the account, and owe $1,500, you'll have access to any remaining money once the levy is satisfied. If you owe more than what is in the account, any money you deposit will be unavailable, or essentially seized/frozen until the levy is paid.

Again, this would be in accordance with what your state laws allow. You might live in a state where they limit the amount that can be levied to a certain percentage of your balance per a specified time frame. The best thing you could do is to speak with a local consumer debt, or bankruptcy attorney as soon as possible to determine what your rights are and/or any actions you could take.

Re: Levy bank account

Johnny35 — Thu, 11 Jan 2024 13:45:22 GMT

Thanks for your reply. Does anyone know what amount of a bank account is exempt in North Carolina?

Levy bank account

Johnny35 — Sun, 23 Jun 2024 18:09:28 GMT

If a creditor has won a judgement... can they empty your bank account to $0 or do they need to leave a certain amount in there for personal needs? Or does it differ in every state? If i had a small amound like $100 in a bank account... would they actually take that? Thanks in advance!

Re: Levy bank account

pizzadude — Sun, 23 Jun 2024 18:23:23 GMT

@Johnny35 wrote:
If a creditor has won a judgement... can they empty your bank account to $0 or do they need to leave a certain amount in there for personal needs? Or does it differ in every state? If i had a small amound like $100 in a bank account... would they actually take that? Thanks in advance!

Which state are you in ? The rules on wage garnishment / bank garnishment will vary widely by state.

Re: Levy bank account

JoeRockhead — Mon, 24 Jun 2024 01:30:05 GMT

Since your other question referenced NC, generally bank accounts are off limits without a court order. However, when someone wins a judgement against you in NC (and several other states) they can immediately ask for a disclosure of assets.

Among different real estate and other exemptions, certain personal property (including linited vehicle equity) is also exempt, but that portion is very limited to about $6k max... if for some reason they think you're playing games, or hiding things they can ask the court to audit your records and ask for a bank account levy

I'd encourage you to speak to an attorney so you have a complete understanding of what your exposure could be.

Re: Levy bank account

Johnny35 — Sun, 23 Jun 2024 18:41:38 GMT

Thanks for your help! I dont have any property or assests. Is it likely for them to go into my bank account to get a few hundred dollars?

Re: Levy bank account

pizzadude — Sun, 23 Jun 2024 20:31:57 GMT

It's hard to know what they'd do. NC law appears to limit wage garnishment and since you don't have any other assets it seems like a bank account levy would be their only recourse but as described above it sounds like there's a process involved.

Re: Levy bank account

JoeRockhead — Sun, 23 Jun 2024 22:04:30 GMT

The thing about judgements in NC is they can be renewed every 10 years... forever.

The judgement holder can require you (if they so choose) to file an assets/exemptions form annually with the court so, while you may not have any kind of significant money deposited now, that doesn't mean you won't in the future.

Each time it's filed they have the right in response to your filing, to ask the court to appoint someone to audit your claims as accurate.

As I said above, you should really talk to a local attorney if possible. To start with, to make sure the suit is even valid to begin with, in addition to what exposure you might face going forward.

Re: Levy bank account

Cowboys4Life — Sun, 23 Jun 2024 21:16:20 GMT

@Johnny35 wrote:
If a creditor has won a judgement... can they empty your bank account to $0 or do they need to leave a certain amount in there for personal needs? Or does it differ in every state? If i had a small amound like $100 in a bank account... would they actually take that? Thanks in advance!

The statement that bank accounts in NC are safe is 100% wrong. Bank account garnishment is legal in all 50 states. Bank levy is only protected if the money in them is from SSI, SSDI, any other disability payment, or a pension but that is under federal law not state. Even then only up to 2 months worth of benefits are safe from levy. Any amount over the equivalent of 2 months of benefits can be levied. Fortunately most people on those programs are living month to month and don't have excess funds there to take. ANY other money in there is subject to levy. If it is a joint account the co-holder could have their funds frozen until they prove to the court what is theirs and what is the debtor's. NC does not allow a creditor to garnish an IRA, 401k or retirement accounts.

While North Carolina does not allow wage garnishment that doesn't protect that money once it is deposited. Wage garnishment is when the employer withholds the amount and sends it to the court directly. Once the deposit is made into the bank account it is just money and can be levied. NC may have a process to file for exemption from levy/seizure but you would have to research that. The problem also becomes that you only find out about the levy after the account is frozen if the funds available don't cover the levy or they take all of it and suddenly your balance is a LOT lower. Then it remains that way while you go through the court process to release it if it is protected.

As for having a small balance: they don't know what your balance is when they serve the levy on the bank. They simply serve legal notice that they have a judgment in $XXXX amount on account holder [name, social etc.] and then the bank identifies all your accounts and freezes them up to the amount of that judgment. If you only have one account with $100 then a new series of problems emerges. Absent protections under state law (they can't freeze if the only money is from a protected sourse like SSI) they will freeze the account. That small balance will be forwarded to the sheriff/court and you will be assessed a fee by the bank for the time/labor of complying with the court order. It is usually $100-200. Once that happens I would expect the creditor to haul you in for a debtor's exam which is legally required for you to answer and appear. Failure to do so can result in an arrest warrant for failure to appear.

As was already said, judgments in NC are good for 10 years and can be renewed indefintely. They also incurr post judgment interest at a rate of 8% per year. Many creditors will wait until a sufficient post judgment balance has accrued and then hit the bank account. It would also be legal for them to find out where you work and what their pay schedule is and then hit your bank the day your wages are direct deposited. If you have a judgment hanging over you working out a settlement or filing BK may be in order rather than that levy hitting when it is least convenient for you and you have no leverage to negotiate with them.

Re: Levy bank account

Johnny35 — Sun, 23 Jun 2024 22:04:04 GMT

How common are debtors exams? A family member of mine has 3 judgements, but moved to a different state afterwards. Should see call the local police station or court house to find out if she has an active warrant?

Re: Levy bank account

Cowboys4Life — Sun, 23 Jun 2024 22:08:11 GMT

@Johnny35 wrote:
How common are debtors exams? A family member of mine has 3 judgements, but moved to a different state afterwards. Should see call the local police station or court house to find out if she has an active warrant?

There is no way to know how common a debtor's exam is.

The good news for your family member is that before they can do a debtor's exam, garnish wages, or levy an account they would have to domesticate the judgments in their new state of residence and that can involve a whole lot of process and new protections.

There will be no warrant unless they were already served with a debtor's exam and they failed or refused to comply. Even then many courts won't issue the warrant after the first failure. They often serve again and after a second refusal THEN the FTA warrant is issued.

Levy bank account in New York

Johnny35 — Wed, 26 Jun 2024 15:20:19 GMT

Is it true that in New York, the first $3,425 in your bank account that are from " non exempted sources " are protected from creditors? So if they levy all your bank accounts, they can only take what is over $3,425? A family member of mine from New York ( with 3 judgements ) has monthly deposits of $1,000 from SSi, and $1,000 from pension. Should she feel safe transfering these exempted amounts to her other bank accounts (making them non exempted) as long as her total savings doesn't go over $3,425 or is it better not to risk it? Thanks in advance!

Re: Levy bank account in New York

CreditPoor — Wed, 26 Jun 2024 15:28:05 GMT

Bro, how many people are after you? You have several threads going. Pay the debt because it won't go away and interest will start to accumulate. Make payment arrangements

Re: Levy bank account in New York

CreditCuriosity — Wed, 26 Jun 2024 15:34:17 GMT

@CreditPoor wrote:
Bro, how many people are after you? You have several threads going. Pay the debt because it won't go away and interest will start to accumulate. Make payment arrangements

Agreed. Please keep to one thread and avoid cross posting please as against forum TOS. People are glad to help you with their knowledge as best as they can but man you have several threads going. Obviously some of this you will need legal advise but looking at your post history over time you appear to have made some choices that are catching up to you now

Re: Levy bank account in New York

pizzadude — Wed, 26 Jun 2024 16:44:53 GMT

@Johnny35- I've combined all of your posts on this topic into one thread, please refrain from cross posting in multiple places. Thanks!