Please help!!!!! Urgent question about bank levy and lawsuits

Do you know what the unpaid debt is? Did they freeze your bank account? Need just a little more info...

A bank levy is when your bank account is frozen and all or part of the monies in your bank account are seized. Bank levy's can happen for many reasons, however the two most common are due to unpaid taxes and unpaid debt.

A bank levy just doesn't happen immediately; usually it is the result of a creditor trying to force a debtor to repay a debt. Obviously in the case of taxes, if the IRS has sent you a letter stating that you owe taxes and you either refuse to pay the debt or don't respond to their requests by either making a repayment plan or trying to work with them towards repayment, a tool they will use is a bank levy. They will freeze your accounts and seize any money in your account up to the amount that you owe.

The bank account can be almost any type of account (e.g. savings, checking, etc) and while most levy's occur in the US, the IRS or other creditors can sometimes go after off shore accounts. Once a bank levy is made on your account, any money that is in the account will be seized. If there is not enough money in the account, all money will be removed and your account will usually remain frozen until the debt is paid off.

It should be noted that while the IRS are usually the ones that use this method the most, other creditors have used this method to receive repayment for their debts. For instance, if you have a judgment against you for a credit card debt, the creditor can file for a bank levy to be placed on your account. While state laws differ, in most cases certain monies in your account are exempt including welfare payments, social security payments, VA benefits, child support, etc. If a bank levy has been placed on your account by a creditor, you usually have 30 days to contest the levy (in the case that monies that were seized are exempt). If a bank levy occurs, you should contact the court to find out how to file for an exemption immediately.

it is my understanding that people are not notified of bank levies (someone correct me if i am wrong).
we process those in work and everyone who calls usually first finds out when their bank accounts are cleared. though i am sure they get heavy collection activity before hand.

IMO, a collector could inform you of the possibilities your accounts can be levied. But they do not have to tell you when :? It usually is a surprise when it happens.

i agree with anyaroberts, it seems thats how it happens. they threaten it, usually a long time before and than kind of pop up with it one and your bank is cleared out. :( it's really pretty scary actually.

Does anyone know if they can levy more than one account?

If you have more than one account at the same bank a levy can be placed on all accounts :(

HOW DO I GET IT LIFTED

I always thought a creditor had to be awarded a judgement, and then have a court order before a bank account can be levied. Although, I believe the IRS does not have to have a court order. If its not the IRS that levied your bank account, then I would check into the situation. Did the creditor that levied your account have a judgement against you? Did they try to garnish your wages first?

We have an issue like this as well. We missed a month and a half of payments to a law firm we have been paying monthly for a credit card debt. Our debt is under 3k. We made a deal with the law firm to stop the levy they told us was put into the court if we sent them 300$, we sent it while they were on the phone western union. They have been telling us as of oct 15th they had sent in a request to the court to have the levy lifted. Not even a week later our accounts were levied!!! They got over 700$ which was mostly my immigration money! The firm is telling me when the court releases the money to them they are going to send the whole amount back since it wasnt supposed to happen in the first place. It has been almost a month and still they say they do not have the money from the courts. Our bank charged us levy fees and a bunch of overdrafts! The law firm also will not give us any kind of paperwork to prove anything. We have asked them in the past for written proof and they refuse to do it. I do not know what to do. This is in TN.

That 'law firm' needs to go back through the court and make this right. You need to file complaints with the FTC, your state AG, and your state bar association, immediately. It's been five days since you posted. Any progress?

unclewulf is right about reporting them, i hope things have worked out a little better for you.

I just found out today that I am in the same situation...big surprise! I had no idea this could happen. I made a few payments to a law firm for a debt from years ago, and then was unable to make payments, and now my bank account is frozen. I am totally lost, freaking out, and can't find a straight answer anywhere on the web. If there is anyone who has gone through this, that can offer advice about how to get my money back in my account so I can start making minimal payments again, please respond. I am more than willing to make payments, but I can't put up the full amount up front--- 850$. That's why I stopped paying in the first place, they told me that my payments of $50 a month were too little. :( I live in Michigan.

It is better for you to take an immediate help from a debt settlement company.The attorneys there will negotiate with your creditors and try to give settlement offers which will again be broken down into small payments(installments),according to your convenience.

Well, there is very little that can be done now as they have already taken the money from your account.

Since you have mentioned that you were making payments to the creditor's lawyers for this debt hence, I presume that there was a contract drawn between you and the law firm, which you have breached by stopping your pays. Hence, a judgment has been issued by the court in favor of the plaintiff's lawyer.

However, some options may still be available to you- if you're not served properly or you have income that is exempted. You may wish to consult a lawyer. But before that, call up the attorney's office and try to work out a deal.

I am on a joint account with my fiance,and the took all his money and mine.Is there a way i can get mine back? He oit levied for child support and the money of mine in the account was child support paid to me.So the took my child support money to pay his child support.

So what is the money they took is exempt? i even have the codes and sections for the money they took.

Do not try the debt settlements companies - it does not work! (personal experience)

As for the bank levy. I just got the same surprise today. I'm in the process of gathering everything needed to file bankruptcy and was hoping I'd be done before anything like that happens but apparently I took too long.

In any case, I asked my lawyer if there is anything that can be done - this is his exact answer:
"Yes, you have an exception of upto $1000. Write a letter to the judge on the matter and appear at hearing. Otherwise if we file beforehand before levy takes effectiveness, we'll get it released."

So that is what I'm working on now - I need to write a letter to the judge explaining how I can't afford to lose my thousand bucks and send it asap before the money is released to the creditor.

And yes, my creditor has a judgment against me and no, they gave absolutely no warning that they wanted to levy my account. It does make sense though - if they told me, I would've emptied it and closed it right away.;)

So if you're in this situation - act fast, write a letter to the judge of the court that is overseeing it (if you don't know, call the bank - I called, they gave me a number to the court that authorized the levy). You might want to check up what the levy exception is in your state. In NJ it's $1000.

And to all of you reading that got a judgment against you - close your bank account and switch to non-electronic billing so that they can't get you like this...:( I wish I had.

Good luck everyone.

Once a levy has been placed on a bank account, what happens if we deposit additional monies to take care of the bank fees that have been accumulated?

The levy will remain on the account until it is paid or overturned. If the levy overdrew the account, you will need to restore it to a positive balance in order for the levy to be paid.

I got my bank account levied a few years ago due to an outstanding credit card debt I owed. In turn the bank account was closed after the levy, or so I though. Fast forward to today I get a new debit card in the bank w/ a balance. The balance is the same amount that was levied a few years ago. Is it normal for a creditor/lawyer to give the money back even if I did not fight the levy?

If your account is levied, it means someone has one a court judgment against you. The levy authorizes them to contact your banks legal department and do a "discovery of funds". Basically the legal department checks your ENTIRE bank portfolio and can debut every account to satisfy the levy. EVERY account the legal department checks can be charged a "legal levy fee" ($100 or more or less depending on the bank.) This is the bank's legal service fee. This can happen weekly or monthly and you will be charged the "service fee" EVERY time they touch the account even if there is NO money in the account.