Can a Creditor Levy Your Bank Account More Than Once?

A bank levy lets creditors take money directly from your account. Creditors can levy your account multiple times until you pay the debt. You have rights and options to fight back.

Understanding how levies work helps you protect yourself and your money.

Your Bank Account Can Be Levied Multiple Times

Yes, creditors can levy your bank account more than once. They can keep coming back until the debt is fully paid.

The creditor must get court approval for each levy. But getting that approval is usually straightforward for them. They just show the court that you still owe money.

If the remaining balance is small, the creditor might not bother. But if you owe a large amount, they’ll likely pursue additional levies.

Check whether your debt was fully paid after the first levy. Knowing your remaining balance helps you understand if another levy might happen.

What Is a Bank Levy?

A bank levy allows creditors to take money from your checking or savings account. They can take money directly to pay off debts you owe.

Bank levies don’t happen overnight. Creditors must follow specific legal steps before touching your money.

Here’s the process: The creditor must sue you in court first. They need to win a judgment that confirms you owe the debt. Once they have that judgment, they become a judgment creditor.

With the court order in hand, they can move forward with the levy. Common creditors include credit card companies, auto lenders, and mortgage companies.

Understanding this process helps you see what’s coming and take action.

How Does a Bank Account Levy Work?

After winning a lawsuit, the creditor asks the court for permission to levy. The court issues a writ of execution, a legal document authorizing the levy.

The creditor sends this writ to your bank. Your bank must freeze the funds in your account immediately. You can’t access that money while it’s frozen.

The bank then sends the frozen funds to the judgment creditor. The entire process can happen within a week or two of the judgment.

Some states use different terms for this process. Florida calls it bank account garnishment. Other states reserve “garnishment” for taking money from your paycheck.

If you’re facing a debt lawsuit, our partner Solo can help you respond. They’ve helped over 280,000 people fight debt lawsuits successfully.

Government Creditors Skip the Court Judgment

The IRS and Department of Education don’t need court judgments. These government creditors can levy your account without suing you first.

If you owe unpaid taxes or defaulted federal student loans, they can act quickly. They bypass the usual legal steps and freeze your account faster.

Government levies work differently than private creditor levies. You need to know your rights when dealing with each type.

You Usually Won’t Get Warning Before a Levy

Neither the creditor nor your bank must notify you before freezing your account. No advance warning is required by law.

Why? Because people might withdraw all their money if they knew it was coming. The element of surprise helps creditors actually collect what you owe.

However, creditors can’t levy your account without warning signs. You’ll receive legal documents when they sue you in court. You might get phone calls from debt collectors or letters from collection agencies.

These notices might come weeks or months before the actual levy. Don’t ignore lawsuits or legal notices. They’re your only warning that a levy is possible.

If you receive a lawsuit summons, respond immediately. Ignoring it guarantees the creditor will win a default judgment against you.

How To Fight a Bank Levy

You have several options to fight a bank levy. Some options stop the levy completely. Others help you regain financial control.

Your main options include:

• Pay off the debt or negotiate with the creditor
• Object to the levy if you have valid defenses
• File bankruptcy to stop the levy and discharge the debt

Pay Off the Debt or Negotiate With the Creditor

Paying the debt in full stops a bank levy immediately. But if that’s not realistic, negotiate with the creditor instead.

Many creditors will accept a payment plan or settlement. You might settle for less than you owe. Reaching out early helps you avoid aggressive collection efforts like levies.

Even after a levy is issued, negotiating can help. Creditors often pause or lift levies once you agree to a payment plan.

If the IRS levied your account and you’re facing hardship, request a levy release. Provide documents showing how the levy affects your basic living expenses. You can appeal if the IRS denies your request.

Object to the Levy if You Have Valid Defenses

You can challenge a bank levy and prevent the creditor from taking your money. Common defenses include creditor errors and procedural violations.

Valid defenses include:

• Creditor error: The creditor miscalculated what you owe or is collecting a paid debt
• Lack of proper notice: The creditor didn’t follow proper legal procedures during the lawsuit
• Identity theft: The debt isn’t yours because someone stole your identity
• Expired debt: The debt is too old and past the statute of limitations

Acting quickly is crucial for any defense. Gather documents supporting your claim and file an objection with the court. Contact your local legal aid agency for free or low-cost legal advice.

File Bankruptcy To Stop the Levy

Filing bankruptcy triggers an automatic stay that stops all collection efforts. Bank levies must stop immediately when you file.

Bankruptcy gives you breathing room to address your debt. You can work out a long-term solution without creditors attacking your bank account.

Chapter 7 bankruptcy can eliminate unsecured debts like credit cards completely. Chapter 13 lets you repay debts through a manageable payment plan. Speak with a bankruptcy attorney for free to explore your options.

How To Protect Exempt Funds From a Bank Levy

Some money in your bank account is exempt from levies. Creditors can’t legally take protected funds.

When a creditor issues a levy, your bank must review your account. The bank should identify any protected funds before freezing money. But mistakes happen frequently.

If the bank incorrectly allows exempt funds to be seized, you must file a claim of exemption.

Under federal law, these funds are automatically exempt from bank levies:

• Social Security benefits
• Supplemental Security Income (SSI)
• Federal pensions or retirement benefits
• Student loan disbursements

Child support payments you receive may also be exempt. However, if you owe back child support, creditors can access these funds more easily.

If exempt funds were taken from your account, act quickly. Filing a claim of exemption helps you recover protected money.

How To File a Claim of Exemption

Submit a claim of exemption form to the court or your bank. State rules vary on where to file.

The form lets you explain which funds are protected and why. You’ll need proof like bank statements or Social Security award letters. Deadlines to file are often short, so act immediately.

Search online for “claim of exemption form” plus your state’s name. Many state and court websites offer downloadable forms with instructions.

After you file your claim, the court reviews it. The court decides if exempt funds should be returned to you.

Your Rights When Facing a Bank Levy

You have legal rights when creditors try to levy your account. Understanding these rights helps you protect yourself.

Creditors must follow proper legal procedures before levying your account. They can’t skip steps or ignore your rights. If they do, you can challenge the levy.

Certain funds are always protected under federal law. Creditors can’t take Social Security benefits or other exempt income. Your state may provide additional protections beyond federal law.

If you’re facing a levy or lawsuit from a debt collector, our partner Solo can help you respond and negotiate. Don’t let creditors take advantage of you.