How to use a bank levy as a means for collecting a debt

How to use a bank levy as a means for collecting a debt

On Behalf of | Feb 23, 2021 | Collections

California creditors often face complex challenges when trying to collect debts owed to them by businesses and individual consumers. There are various ways to secure payment in a legal manner, and one option may include seeking a judgment from the court. After successfully securing a judgment, the most common and effective type of post-judgment relief is a bank levy. This allows a creditor to take money directly from a consumer’s bank accounts.

The bank levy process

Once a creditor secures a judgment, the creditor can obtain a writ of execution from the court (the writ of execution is essentially authorization from the courts to the sheriff to seize assets). Then, the creditor can submit a bank levy packet (including the original writ of execution and several other additional documents) to the appropriate sheriff location to initiate the bank levy process.

The sheriff will coordinate the bank levy with the bank branch indicated in the creditor’s instructions. After receiving notice, the bank freezes the money in the accounts, giving the account holder the opportunity to challenge the levy if he or she chooses to do so.

At that point, the bank can release funds from the account to the creditor to apply toward satisfaction of the debt. The account holder does have the right to dispute the levy. In some cases, this option for post-judgment relief is an effective and relatively simple way for a creditor to collect on a past-due debt.

The rights of California creditors

Creditors have the right to pursue payment of debts owed to them. It may be beneficial to work with an experienced California collections attorney to identify the most effective and appropriate method for securing payment. In some cases, a levy of bank accounts is a way to make sure a debtor pays what he or she owes if other methods of collection have failed.