A financial account levy — sometimes called an account garnishment, attachment, or account freeze — is the result of a court’s judgment or a government agency’s administrative action. A consumer should never be surprised by an account garnishment, as most states have civil procedure laws and agencies have rules requiring the consumer to receive a notice before the levy occurs.
The procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state and federal law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied. See the Bills.com resource State Exemption & Consumer Laws for an overview of each state’s exemption amounts.
Receiving Notice of an Account Levy
An original creditor, or a collection agent that owns a debt account, has several legal means of collecting a debt, including wage garnishment and lien. But before the creditor can start, the creditor must go to court to receive a judgment. A court (or in some states, a law firm for the plaintiff) is required to notify the debtor of the time and place of the hearing. This notice is called a “summons to appear” or a “summons and complaint.” In some jurisdictions, a process server will present the summons personally. In others the sheriff’s deputy will pay a visit with the summons, and in others the notice will appear in the mail. Each jurisdiction has different civil procedure rules regarding proper service of notice. See Served Summons and Complaint to learn more about this process.
If a consumer does not answer the complaint, the court will award the creditor a default judgment. Depending on the state’s rules, the court may or may not notify the consumer of the judgment. After the creditor receives the judgment, it may chose to garnish wages, ask for an account levy, ask for a writ or replevin to seize the consumer’s personal property, or place a lien on the consumer’s real property.
To learn more, please read our collections advice Web page. If you are struggling with debt I encourage you to visit the Bills.com debt relief savings center to get no-cost, no-obligation quotes from pre-screened debt settlement service providers.
You mentioned North Carolina. North Carolina has a 100% exemption on wages, and a $500 exemption for a bank account. The exemption amount is the amount the creditor must leave behind.
I hope this information helps you Find. Learn & Save.