Once a creditor has a judgment against you, it can have a court officer go to your bank and freeze the money in your accounts. There is no requirement to give you advance notice, so a bank levy can be a very nasty surprise!
The good news is that in order to get your money out of the account, they have to petition the court for permission (called a Motion for Turnover of Funds) and give you ten (10) days to object. Although not many, there are a few defenses that you should look into. Levying on a bank account is a common tactic used by creditors to collect a debt in New Jersey.
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This is because it can be highly effective (the asset being levied is liquid) and, depending on the timing of the levy and the balance in the account at the time, often leads to more money being collected at once than a wage execution, since there are no limits on how much money can be frozen (other than the amount due the creditor).
If the balance is more than the amount owed, then there are some funds still available. Unfortunately, if the balance is less than the amount owed, all of the money is frozen, in addition to any moneys deposited after the levy hits (including directly deposited salary). This can cause checks to bounce, such as that mortgage or car payment, and hamper the use of a debit card.
So What Do I Do?
You can fight back with the Bank Levy Survival Kit, but even after that fight is over, you will need to deal with that debt. If you 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!
If you live in southern New Jersey and would like my assistance in either negotiating a deal or fighting the levy, feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office. The cost of the consultation is $200, but it is applied to my fee for representation if you hire me. As a former creditor's attorney I have helped many people deal with situations like this by negotiating on their behalf.
But if this debt is not the only one, 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 right solution. You could also just give me a call and come in to discuss it further!