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Bank Levy? This makes no sense to me

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  • Bank Levy? This makes no sense to me

    I'm reading up on what creditors can do to you to get back their owed money, but this makes me think... If a creditor gets a "writ of execution" or bank levy, and say you have $4,000 in the bank and direct deposit from your employer, they can just take it all down to like $300? Let's say you owe $20,000 do this mean they will continue to get your money even your hard earned bi-weekly pay checks?

    You would end up homeless and die pretty much. How can they keep taking ALL of your money while you can't pay rent or eat with the money you earned that week/month?

    Maybe I missed something, but this just pissed me off reading about it. I thought creditors can only get a wage garnishment, here in Arizona they can take only 25% of your checks, but now I'm reading that they can COMPLETELY wipe out, and continue to wipe out your checking account?

    Sorry for the rant, been stressed to the max lately. I'm gonna start working again soon near me, working 2 minimum wage jobs just to pay rent. It just pisses me off that they can do that.

  • #2
    If you have unpaid judgments, you should NEVER keep more money in a bank account than the judgment exemption, which at the time I dealt with this was $165. It may have been raised since then, as you cite a figure of $300.

    If your bank account balance is LOWER than the exemption amount, then when your judgment creditor(s) serve the bank with a writ of garnishment, the bank will respond with a request for release of garnishee, citing as the reason "no funds available" and no fees will be charged to you. Keep in mind that the judgment creditor will probably wait a few weeks and try again, so don't put more money into the account.

    Of course, once you declare bankruptcy and obtain your case number, the automatic stay will protect you.

    Comment


    • #3
      Originally posted by Trevor View Post
      Sorry for the rant, been stressed to the max lately. I'm gonna start working again soon near me, working 2 minimum wage jobs just to pay rent. It just pisses me off that they can do that.
      A levy can be executed against any property that is not otherwise exempt (from levy) by law. That a creditor uses the tools available to them, to collect what you owe to them, should not make you angry. I do understand that this could impact some people, but there are tools available to avoid a levy on exempt funds.

      As bcohen writes, if you owe a creditor money and they sued you, then you shouldn't keep cash in banks where they can easily levy the account. A bank is not a safe place for money (under certain circumstances). (Yes, I just wrote that!)

      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog


      I am not an attorney. Any advice provided is not legal advice.

      Comment


      • #4
        I just can't see how that's even humanely possible? Imagine a mother with two kids to feed, she's got $1,000 in there, and works, gets her measly pay deposited from like walmart, and here a multi million/billion bank can just suck that money right out. I know a lot of people might think "screw her/him, they made this mess" but sometimes life happens, and that's how a bunch of people are in debt.

        How common is it for creditors to levy a bank? Up until about an hour ago I thought the most they could do is garnish a % of your checks. I was also reading how some people are "judgement proof" meaning they have little money, and no assets etc.

        Let's say I'm living check to check, and I'm paying off my Motorcycle which is a 60 month loan, can they take that? Even though it's not technically mine/paid off?

        This has me thinking, how about having your employer give you a paper check, and then cashing it, and then loading up one of those cash-fill prepaid cards? Example, my apartment complex takes credit/debit cards to pay rent, and I'm sure I'd be able to use those reloadable cash cards to pay. Or maybe just do a money gram/western union transfer.

        Comment


        • #5
          If you have unpaid judgments, DO NOT use a bank account, pre-paid debt card, or other similar financial vehicle unless you keep the balance BELOW the Arizona judgment exemption amount. Instead, I suggest taking your paychecks to a check cashing place (by which I mean a currency exchange, Walmart Money Services, or the bank which your employer uses) and taking the funds in cash, less any fees.

          Then use the cash to purchase money orders for your rent, and for any other bills which must be paid via mail. Any funds left over should be hidden in your apartment, NOT placed into a bank account or loaded onto a pre-paid debit card (except of course if you keep the balance under the judgment exemption amount).

          This is the only 100% guaranteed way to prevent a judgment creditor from "double dipping" if they are already garnishing your wages. If you work in an industry in which high turnover is expected, you may not even have your wages garnished. Likewise, if you have not applied for any credit (or anything else for which credit reports are pulled) using your current job, a judgment creditor may be unable to figure out where you work in order to garnish your pay. An (attempted) bank account levy is a lot more likely, so keep that in mind.

          Comment


          • #6
            That's nuts they can even see a re-loadable visa prepaid card? Or even garnish that too? Lol this is getting worse than the Mafia I swear. I'd rather them just stick an ice pick in my neck and end it. I just checked, my Apartment company takes either echecks or debit/credit card. I can't do like a money transfer like moneygram/western union. I wish it was like my old apartment, cash money!

            What really irritates the hell out of me is that the Bank you have been using for years, can't help one bit. It's like THEY have no rights either.

            Comment


            • #7
              Well, the mafia would dispatch you if you did not pay, or other means of intimidation. Why are you declaring bankruptcy? A bankruptcy would discharge all the debt. The options when you owe money are simple; pay the money owed, discharge the money in a bankruptcy, or ignore the threats for lawsuit and suffer the consequences. What many debtors do when they are being garnished or levied, is to file for bankruptcy and discharge the dischargeable debt. Otherwise, by neither getting on a payment plan with the judgement creditor (and ignoring them) nor filing for bankruptcy, you unwittingly choose the third option; lawsuit, judgement, garnishment and levy.

              Am I missing something Trevor?
              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog


              I am not an attorney. Any advice provided is not legal advice.

              Comment


              • #8
                Originally posted by justbroke View Post
                Well, the mafia would dispatch you if you did not pay, or other means of intimidation. Why are you declaring bankruptcy? A bankruptcy would discharge all the debt. The options when you owe money are simple; pay the money owed, discharge the money in a bankruptcy, or ignore the threats for lawsuit and suffer the consequences. What many debtors do when they are being garnished or levied, is to file for bankruptcy and discharge the dischargeable debt. Otherwise, by neither getting on a payment plan with the judgement creditor (and ignoring them) nor filing for bankruptcy, you unwittingly choose the third option; lawsuit, judgement, garnishment and levy.

                Am I missing something Trevor?
                I'm actually trying to land a job that pays what I was making in NY, if you checkout my other thread about "bad situation" etc. I honestly want to pay off this debt, I got myself into this mess. Right now I'm kind of in a waiting game, and I have some job applications being reviewed right now, jobs that would pay $50,000+.

                I have a question, if they do sue and get the 25% wage garnishment, would they then try to get the Bank Levy? Sorry for all the questions, all this stuff is new to me and it's scary.

                Comment


                • #9
                  As bcohen wrote above, a judgement creditor can seek a writ to garnish pay and/or to levy accounts. I understand your frustration and I do remember the other thread. I feel your frustration because you want to move and/or get a new job, and file bankruptcy to discharge the old debt. The timing is just bad for you and you find yourself between a rock and a hard place. I think it will work out for you as you can always file the bankruptcy.

                  You'll forgive me, please, but has anyone sued you yet? Has any creditor obtained a judgement? Is any creditor threatening to or have actually levied against accounts or garnished your wages? Or are you just trying to navigate through the choppy waters prior to a creditor's action? I think it's the latter and you may be working up your nerves for no current reason. I was scared just before I filed as I thought I'd be homeless. It's now nearly 10 years since filing back in 2008 and I'm still in my home that I'd thought that I would loose. I also thought I was going to lose my job, was about to be hired for another but it fell through, and I thought it was the end of the world (I never told anyone about the job part). Here I am.
                  Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                  Status: (Auto) Discharged and Closed! 5/10
                  Visit My BKForum Blog: justbroke's Blog


                  I am not an attorney. Any advice provided is not legal advice.

                  Comment


                  • #10
                    Originally posted by justbroke View Post
                    As bcohen wrote above, a judgement creditor can seek a writ to garnish pay and/or to levy accounts. I understand your frustration and I do remember the other thread. I feel your frustration because you want to move and/or get a new job, and file bankruptcy to discharge the old debt. The timing is just bad for you and you find yourself between a rock and a hard place. I think it will work out for you as you can always file the bankruptcy.

                    You'll forgive me, please, but has anyone sued you yet? Has any creditor obtained a judgement? Is any creditor threatening to or have actually levied against accounts or garnished your wages? Or are you just trying to navigate through the choppy waters prior to a creditor's action? I think it's the latter and you may be working up your nerves for no current reason. I was scared just before I filed as I thought I'd be homeless. It's now nearly 10 years since filing back in 2008 and I'm still in my home that I'd thought that I would loose. I also thought I was going to lose my job, was about to be hired for another but it fell through, and I thought it was the end of the world (I never told anyone about the job part). Here I am.
                    You're exactly right, nothing crazy has started yet.

                    Currently 8 credit cards are maxed out, which in total is around $27,000 if I remember correctly. One car (ford leaseed) that I owe $14,000 is 3 months behind. My Motorcycle (60 month finance) is current, it's only $150 per month I really don't want to get rid of this. The truck I just got in September is current, it's an 84 month finance @ $470 month.

                    Only Ford is calling me obviously. I know it looks crazy, having 3 vehicles, but it's not uncommon for me. All my life growing up in NY I had 2+ vehicles at a time. The Ford is behind because it had the largest payment which is $600 month. It's really $$$ because negative equity was rolled in.

                    As I sit here right now, I have $9200 in my checking, around $8,000 available credit on cards I never used, and my rent is paid up until May. I had around $11,000 weeks ago, but I payed off huge minimum payments for December, and I'm KICKING myself that I did that now. I should have just let those accounts rott.

                    I wonder what would happen if I let that new truck default after a few payments also, literally if that truck and the ford car get repossessed? How would that play in a Chapter 7?

                    Sorry If my #'s are a bit off from the other post, had a few Capt Morgans.
                    Last edited by Trevor; 12-23-2017, 12:38 AM.

                    Comment


                    • #11
                      Don't worry Trevor... I have had as many as 5 cars under finance at the same time. My original Ford (for a Mercury) payment was over $900/month due to negative equity financed into my loan. Ford, just like American Express and Discover Financial Services, is a ruthless creditor. Your phone will ring forever! I had to dodge Ford's calls, just as the Dodge brothers "dodged" Ford. (Maybe I need a drink because now I'm making ridiculous jokes.).


                      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                      Status: (Auto) Discharged and Closed! 5/10
                      Visit My BKForum Blog: justbroke's Blog


                      I am not an attorney. Any advice provided is not legal advice.

                      Comment


                      • #12
                        Originally posted by justbroke View Post
                        Don't worry Trevor... I have had as many as 5 cars under finance at the same time. My original Ford (for a Mercury) payment was over $900/month due to negative equity financed into my loan. Ford, just like American Express and Discover Financial Services, is a ruthless creditor. Your phone will ring forever! I had to dodge Ford's calls, just as the Dodge brothers "dodged" Ford. (Maybe I need a drink because now I'm making ridiculous jokes.).

                        Cheers mate!

                        Comment


                        • #13
                          Originally posted by justbroke View Post
                          Don't worry Trevor... I have had as many as 5 cars under finance at the same time. My original Ford (for a Mercury) payment was over $900/month due to negative equity financed into my loan. Ford, just like American Express and Discover Financial Services, is a ruthless creditor. Your phone will ring forever! I had to dodge Ford's calls, just as the Dodge brothers "dodged" Ford. (Maybe I need a drink because now I'm making ridiculous jokes.).

                          YUP Ford is calling me 3 times a day.

                          I have a question for you, my current situation with finding jobs is going nowhere. If I have no form of income since my last job which was back in February 2017 is it better for me to file Chapter 7 while i'm unemployed (not receiving benefits)? Or is it better for me to get a job that barely pays my rent, which will show I don't have much disposable income? Best Buy is hiring near me, and it will pay just enough for me to keep my apartment, and eat, I'd have to walk to work and say goodbye to all my 3 vehicles. I know I can't file Chapter 7 if I make a good salary, so maybe get a low paying job to show I get payed poorly. Granted I still have $9000 in my checking account, I don't know how Chapter 7 would look at that? Maybe take the money out and leave it hidden in my apartment?

                          LOL I can always say I blew it in Las Vegas which is 4 hours away from me.

                          Comment


                          • #14
                            Originally posted by Trevor View Post
                            Granted I still have $9000 in my checking account, I don't know how Chapter 7 would look at that? Maybe take the money out and leave it hidden in my apartment?
                            I didn't hear that! LOL

                            This is why we suggest bankruptcy pre-planning; something that I was neither aware of or did. Spending down cash is okay, but you can't just waste it on Vegas (as it may seem as though you are not deserving of a discharge and that you made lavish purchase on the "eve" of bankruptcy).

                            It's a tough choice... starve and file Chapter 7 now... or get a better job and file Chapter 13 later. It's the quintessential question.
                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog


                            I am not an attorney. Any advice provided is not legal advice.

                            Comment


                            • #15
                              Originally posted by justbroke View Post
                              I didn't hear that! LOL

                              This is why we suggest bankruptcy pre-planning; something that I was neither aware of or did. Spending down cash is okay, but you can't just waste it on Vegas (as it may seem as though you are not deserving of a discharge and that you made lavish purchase on the "eve" of bankruptcy).

                              It's a tough choice... starve and file Chapter 7 now... or get a better job and file Chapter 13 later. It's the quintessential question.
                              Yeah nobody is hiring me out here, it sucks. Also won't a Trustee or whoever see that I had $9000 in my bank, because I believe they want to see bank statements of the year. If I do take the money out, it will be very easy for them to see I did that which I'm pretty sure is bankruptcy fraud. I forgot to mention the main reason I'm trying to hold onto this money is because I'm most likely gonna have to pay the 10% penalty for taking out my $35,000 pension out early when I left my previous job of 10 years. Fidelity took out the required 20% Federal tax, but said I "may" have to pay the 10% penalty for taking the pension out before I was 60 years old.

                              It's nuts how I had a plan, take my pension out, relocate, start a new life...and now it's hell. Just today I was driving back from getting coffee and I was cursing like a wild man saying to myself why did I move out here, why did I leave my old life. Sorry if this is a rant, I love your advice justbroke and seriously thank you.

                              Comment

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