Bank levy: your account is frozen
Your bank account is frozen, the hold has an end date and some of the money in it may be protected.
A bank levy is an order sent to your bank, not your employer. The bank freezes the balance that day, then holds it while you have a chance to respond. A private creditor needs a court judgment first, says the CFPB. The IRS can levy without one after its notices.
Money a bank levy can’t take
Federal benefits get automatic protection. Your bank must look back two months and two months’ worth of direct-deposited benefits stays in the account, per the CFPB. On $1,000 a month of Social Security, the bank must leave $2,000 untouched.
That covers Social Security, SSI, veterans benefits and federal retirement and disability payments. The rule is in 31 CFR Part 212. Wages in the account can be protected too, but you usually have to claim it.
What does my notice mean?
What your notice says
The date printed on your paper is the one to beat. Call with it in front of you and a specialist goes through it with you.
Call 833-991-9547The 10 to 21 day window
With an IRS levy, the bank holds the money and sends it after 21 days, says the IRS. The waiting period exists so you can arrange to pay or get it released.
Court levies follow state rules and the papers you get list your deadline. Count it from the day you were served, not the day you noticed the freeze.
Getting a bank levy released
- Call us with the levy notice and your last two months of statements.
- Mark which deposits were benefits or exempt pay.
- File the exemption claim with the court on the order, before the deadline.
- Offer a payment plan in exchange for a release, if the money is not protected.
A bankruptcy filing also stops the levy. For an IRS levy that causes an immediate economic hardship, the IRS says it may be released. See what counts as protected.
Common garnishment questions
How serious is a bank levy?
Serious enough to act the same day. The money is frozen and, after the waiting period, sent to the creditor unless you show it is protected or make a deal.
Will I be notified if my bank account is levied?
Often not in advance. The first sign is usually a declined card. The bank and the creditor must send you notice once the freeze is in place.
Can a bank levy take all your money?
It can freeze everything above the protected amount. Two months of direct-deposited federal benefits must be left alone and some states protect more.
How do I protect my bank account from garnishment?
Keep benefits in an account that receives only those direct deposits and keep your pay stubs and benefit letters. That makes an exemption claim quick if a freeze happens.
Claim your protected money in time
Benefits and some pay in your account can be protected, but you usually have to claim them. Call now and we go through the claim with you before the hold ends.
Call 833-991-9547