Advice on Bank Levies by Judgment Creditor

Advice on Bank Levies by Judgment Creditor

I have a judgment against me for which my bank account is levied every month. How can I change this arrangement?

I have a judgment against me that I cannot pay in full or the offered settlement. The firm is levying my account every chance they get which does not help. I tried to make payment arrangements but they tell me even if I send in payments they will continue to levy my checking account. What should I do next? I'm in California.

I understand how frustrating it must be to endure these repeated bank levies, especially when you have offered to make voluntary payments to this creditor. Unfortunately, since this creditor has obtained a judgment against you, it has the legal right to levy your bank accounts to enforce its judgment.

Depending on your financial situation, it may also be able to garnish your wages and place liens on any property you own, including your home. Since the creditor is repeatedly taking money out of your bank account, the simplest solution to this problem may be to change banks; changing your bank should prevent the creditor from taking any more money out of your current account since that account will no longer be open. Your creditor will not have your new bank account information, as you will have never made payments from the new account, so changing your account may offer you relief from the repeated levies you have been experiencing. Unfortunately, this solution may only be temporary, as the judgment creditor may find your new account by communicating with banks in your area or by demanding the information from you through a court order. These steps will take time though, so changing your bank may at least provide you with some temporary relief while you pursue a more definitive solution to your financial troubles.

To learn more about California’s laws related to the execution of judgments, I encourage you to visit the resources Collection Laws and Statutes of Limitation and California Collection Laws.


Because this creditor expressed resistance to your efforts to resolve this debt voluntarily, you may want to consider filing for bankruptcy protection, as bankruptcy may be the only definitive way to prevent any further collection activity by this creditor. There are two basic types of consumer bankruptcy: Chapter 7 and Chapter 13.

In a Chapter 7 bankruptcy, also called a liquidation bankruptcy, a bankruptcy trustee will examine your assets, and if you have any assets which are not exempt, sell those non-exempt assets to repay your creditors. Once your non-exempt assets have been sold to pay your creditors, all remaining unsecured debts will be discharged by the bankruptcy court. Many people who file for Chapter 7 protection are able to keep all of their property because they have no non-exempt property. Each state has its own schedule of exempt assets, so you should consult with a qualified bankruptcy attorney in your state to find out if Chapter 7 is a workable solution for your situation. An attorney will also be able to tell you if you qualify to file Chapter 7 under the new guidelines enacted by Congress in 2005.

A Chapter 13 bankruptcy, also called a "wage-earner’s bankruptcy," allows you to propose a plan to repay creditors over time — usually five years. Your monthly payment amount will be based on your monthly disposable income as defined by the bankruptcy code. After you have made payments to your creditors for five years, any remaining unsecured debts will be discharged. Chapter 13 is commonly used by debtors whose assets exceed the exemptions offered by state law. It is also used by many consumer debtors who do not qualify for Chapter 7 relief under the means test, which went into effect in 2005 with the Bankruptcy Reform Act.

If you are considering filing bankruptcy, you should consult with an attorney to find out if bankruptcy will benefit your financial situation. I encourage you to read more about bankruptcy at the bankruptcy information page.

I hope this information helps you Find. Learn & Save.




MMark Jackson, Jul, 2013
When it comes to debt collectors levying bank accounts after they have obtained a Judgment against the you know if certain states do not allow any kind of levy for collection? I heard Delaware is the only state where bank accounts cannot be levied by collectors (except on IRS cases). Please shed some light and share your thoughts on this.
BBill Admin, Jul, 2013
No state exempts an unlimited amount of funds in a checking, savings, or similar account from account levy. However, it is illegal to levy some funds traceable to Social Security or other federal benefits, such as the VA. See the page Collection Laws and Exemptions for All States to learn the account exemptions for each state.
KKuba Sroka, Mar, 2012
Hi bill My wife settle her debt with creditor about 6 years ago but we cannot find that letter of agreement Anyway in 2006 we lived in NY and in 2007 we moved to NJ and today my account got frozen because of that debt that they say was never setteled. We were not aware of that debt, we never received any letters and today surprise. What should i do to get my money back? Its weird because my wife gets credit cards and loans with no problem so if the were any collection or court order/ judgement on her credit she would never get any card or loan How this can be possible?
BBill Admin, Mar, 2012
You should have received a notice of the lawsuit filed against you. Consult with a lawyer in your state of residence immediately to learn if you can vacate the judgment that lead to the account levy.
KKuba Sroka, Mar, 2012
I was reading a lot now and someone stated that they can send letters to old address and get the judgment. Also why they would frozen more than they had to? When i called my bank they told me levy was for $1300 and they frozen $2400? Thank you for quick response.
BBill Admin, Mar, 2012
Civil Procedure is a set of state and federal rules created to make a level playing field for the plaintiff (the party filing a lawsuit) and the defendant. One of the most important parts of Civil Procedure is the concept of "notice." Notice is giving your opponent a fair and clear signal of what you send to the court regarding the case. The rules of civil procedure are clear — if you do not give your opponent notice, then you break the rules.

Here, if you never received notice of the action filed against you, how could you respond? If your opponent used an incorrect address to notify you of the summons and complaint, and you were unaware of the lawsuit, then you could not represent your side of the case when it came to trial. That is why I suggested in my earlier response that you consult with a lawyer to discuss filing a motion to vacate the case.

Regarding the account freeze, your lawyer will research your question, and explain (or not) the reason for the unexpected amount. My guess is the court awarded the plaintiff the balance due on the account plus costs.
DDavid Williams, Mar, 2012
I just had my paypal acct garnished and cleaned out how long do I have to contest long are they require to hold the money before releasing it to the creditor...what state do I do all this in? Thanks for any help...David
BBill Admin, Mar, 2012
How long you have depends, in part, on who is levying your account. For instance an IRS levy freezes funds in a bank account for 21 days, before the funds are remitted to the creditor. The length of time is different for state tax authorities and for judgment-creditors. Speak with a lawyer in the state in which you reside to get more information.
RRyan Riek, Feb, 2012
The state of Michigan levied my bank account for a debt that is almost 10 years old. Is that legal? I have called and tried to set up payment arrangements but they wont accept what I am offering. I owe 3k and I offered 300 a month for 10 months. This debt is not taxes. Its from an old court case when I was 19. This just doesn't seem legal to me.
BBill Admin, Feb, 2012
Court judgements are valid for 10 years in Michigan, and may be renewed. Since I am not a lawyer, I recommend that you speak to a local attorney for legal advice.
JJerry Salas, Jan, 2012
Our son receives social security disability. Is he able to open a bank or credit union account that cannot be levied due to judgments by creditors.
BBill Admin, Jan, 2012
See the resource May a Creditor Garnish Social Security Benefits? to read a discussion of the issue you raise in your question.