Bank levies are a very common technique creditors use to enforce judgments.
If you have a judgment against you, your bank account can be levied at any time– even if you have a pending motion to vacate the judgment.
There are a few ways of dealing with a bank levy.
- Bankruptcy stops bank levies. If you file within 90 days of the bank levy, you may be able to get back your levied funds even if they have already been turned over to the creditor.
- You can also file paperwork to “exempt” your funds from the levy. This process is discussed below.
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You Can File Exemptions
Certain types and amounts of money are protected under state and / or federal law from being seized / levied to pay judgments.
When you respond to a bank levy by letting the Sheriff know your funds are exempt from levy, this is called “filing your exemptions.”
Funds exempt from levy generally include amounts necessary for your survival, a certain amount of your wages, 100% of social security payments, and many other funds.
How do I know what exemptions I am entitled to?
Here is a list of some of the exemptions that might apply to your situation: California 704 Exemption List
Federal Law provides additional exemptions; consult an attorney if you have trouble finding an exemption that applies to your situation. There could be an exemption available under federal law.
What forms do I use to file an exemption?
Here is a link to some forms that are often used in filing exemptions:
What are the deadlines for filing an exemption?
Within 10 days of receiving your notice of the bank levy, you must file your exemption paperwork.
Where do I send the exemption forms after I complete them?
- You must serve the exemption forms on the Sheriff’s Department that actually processed the levy.
- NOTE: This is very often NOT the Sheriff in the county where you live.
- The Sheriff will want an ORIGINAL signature. This means you can’t serve the forms by fax or email. (Some counties may provide exceptions.)
- You should also send a copy to the Plaintiff.
What happens after I file my exemptions?
The creditor can ask for hearing if it thinks your are not entitled to the exemptions you have filed.
What is the creditor’s deadline for requesting an exemption hearing?
The creditor must make this request within 10 days of being served with a copy of your exemption paperwork.
What happens to the levied funds when there is an exemption hearing?
If your creditor requests a hearing, the Sherriff will keep your funds in a trust account (if the funds have already been turned over to him or her) or your bank will keep the funds frozen until the hearing is completed and the court decides who should get the funds.
What happens if my creditor doesn’t request a hearing on my exemptions?
After the deadline has passed for your creditor to request an exemption hearing, the funds will generally be returned to you within 14 days by either the Sherriff or your bank.
Can I be levied again on the same judgment? How fast can this happen?
Yes, you can be levied more than once on the same judgment if the first levy didn’t garner enough funds to satisfy the entire judgment.
The levies can happen as fast as the creditor can request them.
But, as a practical matter, the creditor will need to know how much it got from levy # 1 before processing levy # 2. So, in most cases, a minimum of 14-21 days between levies is probably a good bet.
Which California laws govern the levy process described above?