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. A lot of them 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 a Bank Levy
There are several defenses against a bank levy but not all of them will apply to you. The first question 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, unemployment or VA benefits (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. Even if the money is yours, you can protect up to $1,000 and get it out of the levy. The bad news is that in the meantime, the funds are frozen, unless voluntarily released by the creditor.
How to Object to the Levy and Assert 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.
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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. Bear in mind that you have to present evidence to support your defense. You need to be able to prove (by attaching at least 3 months of bank statements) either that the money is not yours, is not all yours, or consists of exempted funds. If you cannot do this, you may not prevail.
Want more information on how to fight back with your creditors? Then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!
Can You Help with the Objection?
The first thing you need to do is download my free Bank Levy Survival Kit to fight it yourself without having to hire a lawyer! It has the necessary form and an instruction sheet on how to use it. This can be used as a Motion to Object to a Bank Levy or as an opposition to a Motion for Turnover of Funds.
After dealing with the levy, and you still owe more than $10,000 to the creditor, if you want a lawyer to help you negotiate a payment plan, and you are ready to take action, then just click this link to schedule a call with me to discuss your case. I have represented creditors for many years and am familiar with the collection industry and how it ticks. Put my experience to work for you!
However, if your debt situation goes beyond one or two creditors, and you are wondering whether you need a solution to a bigger problem, then download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey to find out if bankruptcy might be the best way to go.
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