Can My Bank Account be Levied?

What are the rules for account levy?

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Man at ATM | Account Levy
Bill's Answer: Answered by Mark Cappel

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 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 debt relief savings center to get no-cost, no-obligation quotes from pre-screened debt settlement service providers.

Your Question

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.

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Comments (4)

M. L.
March 12, 2014
We live in AZ and before we got married my husband had a credit card go to collections. Garnishments out of his checks are one thing but we are worried about them getting access to the bank account. I own the account and he's only P.O.A. Now that we're married can they access my account? Hoping its safe since all this was before me.
March 12, 2014
If your husband's social security number is associated with your account, then your account could be levied. If he has only a general power of attorney, then your account should not be at risk.
Wiser but W.
Clinton, IA  |  March 07, 2014
I had a judgement against me in 2004, They have not attempted to contact me or filed with the courts since since april of 2006 until May 2013. By the statue of limitations, Iowa is 7 years with no contact shouldn't the case be expired? Why is it still open?
March 07, 2014
I will assume you are an Iowa resident.

Iowa and other states have separate statutes of limitations for different things. The state has separate statutes of limitations for contracts and for judgments. Read the page Iowa Collection Laws and then ask any follow-up questions you may have on that page.
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