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BANK LEVIES AND BANKRUPTCY

If you have recently been levied by a creditor then you know first-hand the nasty feeling of being attacked by surprise, sometimes without notice.

In order for the creditor to have levied the money from your bank accounts, they must have obtained a court judgment against you as the debtor. (This is different from rights of set-off, which I will discuss in a future blog). The bank uses this judgment and then attaches it to your bank accounts or any accounts attached to your social security number. Then they can simply take their judgment award from the funds remaining in your account.

This can and should be avoided with the filing of a bankruptcy petition. Since California offers generous protection to money in bank accounts, filing bankruptcy before a bank levy can help safeguard these needed funds from creditor's possession.

However, if you have fallen prey to a bank levy, there is still hope. The creditor exercises their levy, but the funds are often held (sometimes by the bank, most of the time by the levying officer - the civil department of the sheriff's department) for a period of time (sometimes up to 30 days after the execution of the levy). If you file your bankruptcy after the levy has taken place, we can still recover the funds if the bankruptcy filing occurs in time and the funds are still within the possession of the bank or the levying officer 9and otherwise exempt under applicable provisions, generally CCCP 703.140, also known as the wildcard).

What this means for you is that if you suspect that a creditor is close to getting a judgment against (and any creditor can if they are not being paid according to the terms of their contract with you), then you should make it a priority to contact us, so we can move quickly to block your creditor's next move and save you your hard-earned money from surprise attack.

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