What is a Bank Levy? You may be wondering. If you are not yet owing any debt you might not know what it is. In this article today we are going to be taking a look at what a bank levy is and how you can avoid it.
We are also going to take a look at how it works and the circumstances around when banks decided to levy customers.
If it sounds like what you might be interested in or you have seen a bank levy on your account statement then read through this article to the end. To know everything about a it let’s go ahead and jump in.
What is a Bank Levy?
A bank levy typically occurs when a creditor which is person that you owe a debt simply reaches out to your bank to automatically withdraw money from your account to pay the Debt you owe without your permission. This is basically what a it is, which is when money is automatically withdrawn from your bank account by the direction of a creditor to pay for your debt.
That being said you should also know that not all creditors have the permission to pull a bank levy on your account. One of the major type of creditors that cannot make a bank levy on a debtor is a credit card company. They simply did not have the right to impose a it on your account even if you are a Debtor. However if your bank issued the credit card they can impose a bank levy on your account.
How Does a Bank Levy Work?
A bank levy is not something that you can easily do without the permission of the court or anybody. A credit of must first have to win a money judgement in the court in order to obtain permission to impose a bank levy. Any collector that wins a money judgement automatically becomes a judgement collector who can use any means to collect on a debt when did debtor refuse to pay.
Your creditor can now provide a proof of legal judgement against you to your bank in order for them to take the necessary action. Government creditors such as the IRS does not need a legal judgements against you before taking necessary actions. What a judgement has been made against you your account will be frozen and the bank levy deducted from your account.
How to Avoid and Stop a Bank Levy
Once a proof of a legal judgements has been obtained against you from the court it is only a matter of time before you receive a it. Once a levy has been imposed on your account there is no way to recover the money back however there are certain steps you can take to protect yourself against it. Some are the steps to take to avoid and even stop a bank levy and listed below:
- Prove declarative made an error – one of the best way to stop this to simply prove that there is an error that led to the bank levy. If you prove that you did not owe them any money then it is a very good way to stop it. Most time skeletons make a rose because death gets passed down from 1 debt collector to another. So prove that the debt is not yours to avoid a levy.
- Identity theft – you can simply verify your identity to prove that the debt that you are been livid about is actually for someone else. Make sure you draw the attention if you are a victim of identity theft that someone else borrow the money and received the fund.
- Check if the debt is beyond the statute of limitations – you need to check if the debt has passed the statue of limitation because if it has then you have every right to reverse it. Old debts that have passed their starting of limitation cannot be enforced by creditors to be paid.
- File for bankruptcy – filing for bankruptcy is only an option when you have been overwhelmed with your financial expenses that you cannot seem to get a break. So you should definitely file for bankruptcy.
- Stop using your bank account if there is no fund in it it will be a possible for a bank to impose a levy on it.
There you have it these are some of the ways you can use to stop or avoid it if you know it is a potential option for your creditors.
Can a Bank Levy ever be Lifted?
It cannot be lifted as long as the creditor is within their legal right to impose it on your account. The only thing you can do is to simply negotiate a way for you to pay off your debt so that the creditor will stop imposing it on your account. It is a heavy burden to bear so you should not ignore it rather you should find a way to move past and settle it.
How long Does a Levy Stay on your Bank Account?
It will stay in your account as long as the statue of limitation for your state has not been reached. During this period our creditors can impose a bank levy on your account without having to consult you.
However once the statue of limitation is reached for that bank levy the creditors have no rights but they can certainly keep on pressuring you to pay. In that case you have the right not to pay.
FAQs about Bank Levy
How do I stop a bank levy in NJ?
There are several things that you can use in objecting to a bank levy some of them are listed on this article you can simply decide to follow them. You can also decide to object to a it in a state court so that a hearing can be held. However for the bank lady to simply Go away easily you can decide to file for bankruptcy.
What happens if your bank account is levied?
When a levy is made funds in your account immediately frozen this means that you will not be able to withdraw funds from your account. Once the amount has been deducted from my account you can resume normal accounts operations.
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