Bank Levies

A bank levy occurs when a creditor or taxing authority instructs your bank to withdraw money directly from your account to satisfy a debt. In most cases a creditor must first sue you and obtain a money judgment before a levy can be issued. Certain government creditors, like the IRS, can levy funds without going to court.

Levies typically arise after repeated collection attempts fail. The creditor serves your bank with a legal order and the bank must freeze the funds in your account up to the amount owed. While frozen, you may not access the money for basic living expenses, and the bank may charge fees for processing the levy. Some funds—such as Social Security benefits or child support—may be exempt, but you must act quickly to assert those protections.

Filing for bankruptcy stops bank levies through the automatic stay and may allow you to recover some funds. We can help determine whether the levy is valid, what exemptions apply and whether bankruptcy or settlement is the best path forward. If your account has been frozen or drained by a creditor, call today to discuss your options and protect your assets.