Bank Levy and Wage Garnishment Laws
Bank levy and wage garnishment laws are complicated and involve creditors seizing or freezing assets, or streams of income. Levies apply to financial accounts, while garnishments apply to wages. A creditor can institute a bank levy and wage garnishment if you owe unpaid debt.
Process of a Bank Levy and Wage Garnishment?
Creditors must first get a court order (“money judgment”) before they can start a bank levy and wage garnishment case. However, federal agencies (IRS or Department of Education) can do so without judgment. These federal agencies are only required to give a notice of intent to a bank levy and wage garnishment. They must give you a reasonable amount of time to pay the debt in full, or respond in writing.
Differences Between Bank Levies and Wage Garnishment
A creditor enacts a bank levy. They freeze a financial account and take money from that account to cover your debt. The levy is removed when the debt is paid in full. Creditors can also raise a lien against your property, or repossess your car or other personal property. This is called a property levy, and a creditor must get a “writ of execution” from the court.
A creditor raises a garnishment in order to force your employer to seize a portion of your wages. The law requires the employer to send those earnings to the creditor. Usually, both of these judgments are valid for several years before they “lapse.” In some states, a judgment is effective for 5 to 7 years. Even then, a creditor can often renew the judgment, in effect making the bank levy and wage garnishment permanent.
Who Uses a Bank Levy and Wage Garnishment?
Usually, levies come from government agencies, such as the IRS or Department of Education. Private creditors (like credit card companies) can also execute levies. Any private entity must first obtain a court order before it can touch your bank account.
Wage garnishments usually come from private creditors. Like levies, the private creditor must obtain a court order to issue a wage garnishment. The IRS and Department of Education also use wage garnishments to collect past-due taxes and student loans.
Types of Bank Levy and Wage Garnishment Judgments
A creditor can collect debt by:
- Property repossession (cars, furniture, appliances, electronics, house, etc).
- Enforcement to collect child support.
- Tax refund intercepts (IRS intercepts your tax refund to pay debts owed).
- Freezing of bank accounts.
- Bank setoffs (if you miss a payment on a bank loan).
Before engaging a debt collector, it’s smart to have good legal representation. A good attorney can keep you out of trouble, and know when to fight the creditor or not. Remember, you can be jailed for interfering with a sheriff attempting to repossess your car or property.
Place your trust in an attorney who not only will fight for you and do the job right, but also cares about what happens to you and your family.
Call for a FREE, No Obligation, Legal Consultation with Mr. Taibi and GET THE FRESH START YOU DESERVE!