Implementing bank levies as a means of collection

Implementing bank levies as a means of collection

| Jan 4, 2021 | Collections

When an individual or California business is behind in making payments on a debt, the creditor may take legal action in order to collect on that balance. One way this may happen is by asking a court for a judgment, which is something that allows the creditor to secure money from the debtor even without the debtor’s cooperation. Bank levies are a commonly used and effective means of collection.

Essentially, a bank levy allows a creditor to simply take money from the debtor’s bank account. It allows a creditor to access bank accounts and other assets and take money for payment, even draining the account if necessary. When taking this step, the bank will first freeze the account and review all documentation, including the court order. The bank may or may not give advance warning to the account holder.

Even though an account holder likely already knows he or she owes payment to a creditor, the levy can be disputed. This may prevent the withdrawal of funds from the account or at least slow the process. The bank may also charge account holders additional fees for having to process the levy.

Bank levies are effective, but this can be a complex process. It is prudent for a creditor to work with a California attorney experienced in various collection efforts and applicable laws to assist with the enforcement process. Working with a legal ally at every step can minimize the chance of complications and reduce the possibility that setbacks will occur that will make it more difficult for the creditor to secure payment.