How Do Bank Levies Work?
Posted By The Pritchard Law Firm || 06/20/2016
Openness and honesty can go a long way when dealing with debt, either as the debtor or the creditor. Inversely, dishonesty can cause some significant issues.
Consumer collections agencies and creditors have a right to know about the finances and estate of their debtors, to a certain extent; they do not have to simply accept a debt for what it appears to be at face value and go from there. Some debtors may attempt to reduce how much they pay back to creditors by falsifying the amount of finances in their private accounts. If a private creditor gets word of this deceitful tactic, they can impose a bank levy against them.
A bank levy will freeze an entire account and take as much from it as needed to pay off a debt. If there is not enough in the account to pay off the debt, any money that is later put into the account will be syphoned straight to the creditor that created the bank levy, up until the debt is completely paid off.
When Private Lenders Use Levies
Levies are pretty powerful tools, needless to say. Due to their strength and effectiveness, they are usually only used by government entities. A private lender who wants to use a bank levy on a debtor that has intentionally tried to avoid there debt must first receive an official court order to do so.
This court order can actually be used to the advantage of a debtor. Before the account can be frozen, the debtor must be notified by the court. This actually gives them a brief window of time to extract money from the account and put it elsewhere, perhaps in one untouchable by the creditor. If done using certain legal loopholes or under certain circumstances, this circumvention of payment can actually be legal.
If you are a creditor or consumer collection agency who needs to collect from a dishonest debtor, talk to The Pritchard Law Firm and our Fort Worth consumer collection attorneys today. We can put more than 45 years of combined legal experience in your corner and help you legally impose a bank levy against a customer’s account. Call today for more information.