How To Stop A Bank Account Levy From A Creditor
At some point, a creditor may try to place a levy on your bank account. This automatically freezes some or all of the assets in your bank account. The money in your account is generally held for approximately 21 days before being turned over to the creditor to pay your debts. This gives you time to contest the levy and find ways to deal with the creditor, including filing for bankruptcy.
Ways To Stop A Creditor From Executing A Levy On Your Bank Account
As of May 2011, a new rule states that creditors cannot take money from accounts that receive electronic deposits from exempt federal sources such as:
- Social Security benefits
- Federal pensions
- Veterans’ benefits
Banks are required by law to flag these accounts as receiving federal benefits. This is supposed to prevent creditors from taking the money you need to survive. If a creditor places a levy on your account, the exempt funds cannot be given to the creditor to pay your debts.
Our New Jersey bankruptcy attorneys can discuss your options for how to stop a bank account levy from a creditor and what you can do to remedy the situation.
Contesting A Levy On Your Bank Account
Once a creditor, such as a collection agency, has filed a notice of motion for the turnover of funds, you can file an objection. New Jersey law protects the first $1,000 in your bank account from being taken by creditors. Anything above that amount will be subject to payment to your creditors to satisfy the levy.
Many people who are in debt may not have more than $1,000 in a bank account. For those who do, the only effective way of protecting that money is to file for bankruptcy. This puts an automatic stay on the account and prevents any creditor from harassing you further. It also stops wage garnishment, foreclosure and repossession of your property.
Contact experienced personal bankruptcy lawyers with offices in Paterson, Jersey City and East Orange today to find the solutions to your financial problems. Call 973-414-8069 for a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.