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JudgmentBuy Article:

Bank Levies

I am the nation's only Judgment Broker, and I am not a lawyer. My articles are my opinions, and not legal advice. If you ever need any legal advice or a strategy to use, please contact a lawyer.

If you know where your judgment debtor banks, a bank levy is often the simplest way to recover a judgment. A bank levy, called a garnishment in some states, happens when the Sheriff or their agents (and sometimes also registered process servers), with proper instructions and payment, instructs a bank to seize your judgment debtor's bank account funds to help pay what is owed toward satisfying your judgment.

If your judgment debtor has enough money deposited, when their account(s) are frozen to satisfy your judgment; you might get your whole judgment recovered with one bank levy. However, usually, judgment debtors have less in their bank account than what is required to fully satisfy your judgment. You may have to keep trying more judgment enforcement strategies, to recover the rest of your judgment.

As important as how much money is in your judgment debtor's bank account is; much depends on the laws of your state. While a few states restrict or do not allow bank levies, most allow them. Often, creditors must call the bank and ask for their levy department. They may tell you about other levies ahead of yours. They may also tell you instructions for the process server or sheriff, including that "when the Sheriff/process server shows up, have them tell security to contact HR, and representative will come downstairs and accept the documents".

Bank levies require specific forms and documents. Levy information can be found online, including laws, articles, and other resources. Your local court or Sheriff may have laws and policies on their web sites, including the required forms.

The costs to levy a judgment debtor's bank account varies from state to state, and sometimes also by county. You must get permission from the court, and buy a writ of execution or its equivalent from them. Then you must pay the Sheriff and sometimes also a registered process server. In California, this costs an average of $65 to $165, depending on which county. There are never any refunds for any fees you pay.

Usually, the biggest challenge is finding out where your judgment debtor banks. In some states and/or banks, due to old laws written when typewriters ruled the Earth; one must levy the exact branch where the judgment debtor's account was first opened at. If you have your judgment debtors' bank account number, call the bank and ask for the address for branch, then tell them the first four digits of the account number. This might tell you the branch the judgment debtor opened their bank account at.

A great reference to find the branch of most banks is at: www.GregtHatcher.com/Financial/Default.aspx

Make sure to double-check your information, especially when your debtor has a common name, or shares their name or SSN with relatives. If you levy the wrong person's account, you must return their money, or ask the Sheriff to return their money. You should also pay them something extra, more than what is required to cover their hassles and incurred costs due to your error. Another potential levy complication is, sometimes even when you levy the correct debtor's bank account, some will lie and say you have the wrong person.

Bank levies do not always work, and can fail for many reasons including no money was in the account, overdrawn accounts, the bank claiming (sometime lying?) that there is no such account, name variations, SSN sharing, DBAs, trusts, bank shared ownership issues, typographic errors, technicalities, and timing issues.

Often, the Sheriff requires you to type a document with instructions to the bank, where you ask them to freeze any and all accounts that your judgment debtor has at their bank. One should word their instructions to include all accounts matching the name and Social Security number of the judgment debtor.

If the stars align, and your paperwork is right, and your instructions are clear and specify what is required; the bank should freeze all the accounts belonging to the judgment debtor, including checking accounts, savings, safe deposit boxes, etc.

You will need to find out the name and address of the banks, credit unions, or other financial institutions where your judgment debtor has money deposited. You can always serve the agent for process of service. Once you know that, you fill out the forms, write a few checks to the Sheriff and the court, and perhaps also a process server. Then you wait weeks or months to learn the levy results, or for your check to arrive.

When you as receive a check for a successful bank or wage levy, who writes the check, the Sheriff's Office, or the bank? In a few states, the employer or bank sends the check to the creditor. In most states, the wage garnishment or bank levy file is opened with the County Sheriff's "Levying Officer", and any frozen funds are sent directly to the Sheriff's Levying Officer who, after the requisite accounting paperwork has been completed, then sends a check, minus their "processing fees" to the creditor. Long ago, in California, the checks were sent to the County Auditor, that then mailed a check to the creditor.

If your judgment debtor is a corporation, their bank accounts can be levied too. It is often easier to discover where a business banks, than it is to find out where a person banks.

When your judgment debtor finds out that their account is frozen, they may be angry. They will also know you are serious about getting paid. Often, when a partial recovery is made with a bank levy, discussions about payment plans begin. One common agreement offered by judgment owners is: "No more bank levies will happen, as long as the judgment debtor stays current on a payment plan".


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