What do I do if a creditor levies on my NJ bank account?

A:

People being pursued by creditors in New Jersey can get a nasty shock from their bank: their accounts have been levied upon by a creditor.  Many people come to my office in a panic wanting to know what, if anything, they can do.  Well, here's the deal.

How to Defend Against It

There are very few defenses against a bank levy.  What I ask my clients is, is the money in the account yours?  This may seem like a silly question, but it is very important.  Just because your name is on the account does not mean it contains your money or can be levied.  This can be for several reasons:

• Your name is on the account for convenience of writing checks, such as for a spouse or elderly parent, but you do not deposit money into it;
• The account is joint with your spouse, he or she does not owe the debt, and some or all of the money in the account is his/hers; or
• The account contains Social Security benefit money (which cannot be levied upon in New Jersey)

The good news is that these are the bases for an objection to the levy and can result in some, or all, of the funds being released to you.  The bad news is that in the meantime, the funds are frozen, unless voluntarily released by the creditor.

How to Assert Those Defenses

After the levy is done, the creditor has to make a motion before the court to take the money out of the account.  This is called a Motion for Turnover of Funds.  Once you receive this, you have a limited amount of time to object and be heard on any defenses you may have.  You do not have to wait for that motion to be made, however.  You can file your own motion objecting to the levy to get your money released.

If you reside in Southern New Jersey and have had your account levied and have one of these defenses, call my office at 888-857-8418 or contact me through this site as soon as possible.  I can assist you in filing an objection. There have been many occasions when I have been able to help people deal with these levies and work something out with the creditor.

Related Topics

• What is a bank levy?
• A creditor levied on my bank account; is it safe to deposit money now?
• What does it mean to be judgment proof?

Have more questions about bankruptcy?  Get the answers to the most frequently asked questions by downloading my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey.  It will give you the answers you need all in one place.  Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.