Bank Account Levies Explained
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What Is a Levy on a Bank Account?
How Do Bank Levies Work?
How Much of Your Bank Account Can Be Levied?
Can You Stop a Levy From Occurring?
How Can You Fight a Levy on a Bank Account?
Claiming an exemption. If the funds in your account are considered exempt from collections, you can file an exemption to prevent that money from being levied. For example, government benefits (such as Social Security and federal employee pensions) are generally protected. Money you’ve received from child support payments may also be exempt from collection. Prove the creditor made a mistake. If you don’t think the debt is yours or believe the amount is wrong, you can send a debt validation letter via certified mail. In the letter, you’ll want to say that you are disputing the debt’s validity and want to see documentation that shows the debt is yours. If you’ve paid the debt that they are claiming you still owe, be sure to include proof of payment, such as a receipt or statement. Prove your identity was stolen. If the debt was a result of identity theft, you can fight the levy by proving that someone else received the borrowed funds. To do this, you’ll need to submit an identity theft report (which you can get by reporting the identity theft to the Federal Trade Commission). You’ll also want to file a police report and submit that along with your identity theft report. Check the statute of limitations. Creditors have a certain time frame (called a statute of limitations) during which they can legally collect debt from you. You can check your local laws or consult a lawyer to find out what the statute of limitations is for the type of debt you owe. If the window has closed, you may be able to stop the levy. File a hardship claim. You may be able to contest a levy imposed by the federal government (such as the IRS) if it poses a financial hardship that threatens your ability to pay for basic needs, like housing, food, and essential utilities. File for bankruptcy. Though this is something you would only consider as a last resort, you may be able to recoup some or all of the levied funds if you file for bankruptcy immediately. Laws vary by state so you would want to consult a bankruptcy attorney in your area to find out how bankruptcy would impact your bank levy.
Who Is Authorized to Use Levies?
Can You Open Another Bank Account if Your Account Is Levied?
How Long Do Bank Levies Last?
Frequently Asked Questions
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