A New Jersey Collections and Credit Attorney Explains What to Do if a Creditor Levied on Your Bank Account
If you received a letter or a call from your bank telling you a creditor has levied on your account and your funds are frozen, you may have questions. Not only will checks bounce if they have not already cleared, but what will happen if you put more money into the account? What if you have direct deposit for your paycheck and are getting paid tomorrow? Will that money be frozen, too? As a New Jersey debt relief attorney, I can determine what options you have and explain what to do if a creditor has levied on your bank account. The amount of a bank levy is not the amount of money that happens to be in the account when the court officer shows up; it is the amount on the writ of execution he is holding in his hand.
When It's Safe to Deposit More Money
For example, if a creditor gets a judgment against you for $5,000. When it pays the levy fees and costs and gets a writ of execution to do it, the balance is $5,500. If you want to learn how to get back some or all of your money out from the levy, download the FREE NJ Bank Levy Survival Kit NOW
If you had $6,000 in the account at the time of the levy, then only $5,500 is frozen, and the remaining $500 is available for withdrawal. You could safely put more money in.
Even if the amount of money in the account is insufficient to satisfy the judgment, you may still be okay. Let's say you had $3,000 in the account to satisfy the $5,500 judgment, which gets levied. The creditor will want to take out that $3,000 to get paid and, as such, will not want to wait to see if you deposit more later and send the court officer back to the bank. They will make a motion for the turnover of those funds in the account now.
When Further Deposits Are at Risk
The problem comes in when there is less than $1,000 in the account, as against that $5,500 judgment. Under the law, you can protect personal property up to $1,000 from creditors. This is called an "exemption." They may wait to snag more money to get the levy balance above the exemption to get some money, even if you object. If your $1,500 paycheck hits the bank after the levy, that too could be frozen, bringing the levied funds to $2,500 on a $5,500 levy, thus giving the creditor at least $1,500 (unless another exemption applies).
Therefore, it is essential that you find out from the bank the following two things:
- The account balance at the time of the levy
- The total amount on the writ
Understanding this information can help determine whether it is safe to deposit more money into the account.
What You Will Need to Do
Just because your bank account has been levied does not mean the creditor can keep all the money. As mentioned above, you may have defenses that could be raised before a judge to prevent them from taking some or all of the money. Check out my free NJ Bank Levy Survival Kit to learn more!
Want more information on how to fight back with your creditors? Then download the free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!
If you live in Burlington, Camden, Gloucester, Salem, or Cumberland County, have had your bank account levied, owe more than $10,000 on the judgment, and want to retain me to negotiate a deal with the creditor, then just click this link to schedule a call to discuss your case. The sooner you take care of it the better!
But if this bank levy is a sign of a bigger problem with creditors, and you think you might have to file for bankruptcy, then download the free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey.
