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If you are struggling to keep up with your bills and have fallen significantly behind, one of the things you might find yourself facing is a bank levy. A bank levy is a powerful tool that creditors can use to get money from you at a time when you can’t afford to give it. Bankruptcy is one solution that can effectively deal with bank levies while ridding you of debt you cannot afford to repay, giving you a fresh start financially. If you are overburdened with debt and facing a bank levy, wage garnishment, lien, lawsuit or other creditor activity aimed at taking what little you have and leaving you with nothing, take action now by contacting The Law Office of Charles A. May. We help people in Orange County, Los Angeles and Southern California deal with creditors and debt and take back control of their finances. Call our lawyer today for a free consultation.

What Is a Bank Levy?

A bank levy is a legal action taken by a creditor to seize funds from your bank account as a way to collect on a debt you owe. This happens after a creditor has obtained a judgment against you, authorizing them to access your bank account directly.

When Can and Can’t an Account Be Levied?

In most cases, a bank account can only be levied after the creditor has won a court judgment against you. After the court ruling, the creditor receives a ‘writ of execution,’ giving them the authority to levy your bank account. The writ gets delivered to the bank by the sheriff (or a process server), telling the bank to deliver over the amount of the levy.

As scary as that sounds, protections do exist. For instance, a bank levy cannot clean out your account. You must be left with enough money to pay for basic necessities. This amount is set by law and updated annually.

In addition, certain funds cannot be levied at all. California is a consumer-friendly state in general and contains numerous exemptions that protect certain kinds of funds from the enforcement of judgments. A few notable exemptions include:

  • Social Security benefits
  • Unemployment benefits
  • Supplemental Security Income
  • Disability insurance benefits
  • Pension plans and death benefits

The actual list is much longer, but not every exemption applies in every circumstance, and even applicable exemptions might not fully apply. You need an attorney familiar with bank levies who can determine whether or not particular exemptions apply in your case. Charlie May in Irvine is an experienced tax attorney who has spent years navigating intricate California laws and helping people in difficult financial situations. He will take the time to understand your circumstances and review the statutes that might apply.

Act Quickly to Preserve Your Rights

A bank levy is serious business, and time is of the essence to protect your rights. If you think the account is protected under a California exemption, you can challenge the levy. Once a bank levy is issued, you will be notified about the levy and given the opportunity to assert that the money in your account is protected and should not be levied. You must act quickly to challenge the levy; you only have 15 days (or 20 days if you were notified by mail). If the creditor agrees the money is exempt, the sheriff will return the money to your account. If the creditor disagrees, and wants to keep the money, they will have to go to court and convince a judge that they are entitled to the money.

Deal With Bank Levies Through Bankruptcy

If the account is unprotected under a California exemption, another option is filing for bankruptcy, which can immediately stop most types of levies under the ‘automatic stay’ provision. The automatic stay goes into effect as soon as you file for bankruptcy and halts most bill collection activities, including bank levies. This means that your money stays where it is—at least temporarily—giving you a chance to breathe and plan your next steps.

There are two main types of consumer bankruptcy:

  1. Chapter 7 Bankruptcy eliminates your unsecured debts like medical bills and credit card debt. Chapter 7 could require you to sell some of your assets, but only if they are not protected by an applicable California bankruptcy exemption. Many if not most filers get a “no-asset” bankruptcy that allows them to keep all of their property. You must have a low level of income to qualify for Chapter 7.
  2. Chapter 13 Bankruptcy sets up a repayment plan to pay back your debts over three or five years. Many debts are adjusted so you only pay a portion, and others get discharged. Chapter 13 is helpful if you do not qualify for Chapter 7, if you have valuable non-exempt assets, or if you are dealing with secured debt like a home mortgage. Chapter 13 can cure a mortgage default, keep you in your home, and fix problems with underwater second or third mortgages.

Get Immediate Help With Bank Levies and Long-Term Solutions to Debt

The Law Office of Charles A. May is here to guide you through these difficult times. We will advise you on your options and seek immediate relief from a bank levy while we work on solutions to solve your debt issues for the long term. Do not let a bank levy turn your life upside down; help is available. For help with bank levies and other issues in Orange County, Los Angeles or throughout Southern California, call The Law Office of Charles A. May for a free consultation.

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