Do you want to make use of your account but somehow it shows you that your account has been frozen? Then sadly, there is a levy on your account. But if you are curious about what is a levy on a bank account, then you have come to the right platform. I am also glad you found this website because I would love to help you as you read through this blog post. Firstly, if you have a levy on your account, it means that you have somehow defaulted in making payments.
So, if you collected a loan or mortgage for instance and you haven’t paid it back yet, then the creditor has the power to put a stop to your account by freezing it. Furthermore, the people who use levies are creditors. Therefore, if you want to get rid of this levy, then you need to make sure that you pay back the money you own. Or you can also get in touch with the IRS to assist you to settle and sort out your tax liability.
How Does Levy On A Bank Account Work?
Bank levies are authentic actions that the bank gives to creditors over borrowers. Furthermore, it also allows creditors to remove funds from your account legally. So, how it works is that the bank will freeze and withdraw from you the permission to access funds in your bank account.
After this, you are required to transfer the money to your creditors or lenders to complete and pay off your debt. However, before a creditor asks for the money, the lender will have to prepare the request to your bank.
Equally important, the lender also needs to provide a legal judgment. However, not all government lenders demand or ask for a court judgment.
Who Can Put A Levy On Your Bank Account?
The person or association behind levies is the bank. In other words, the bank put the levies. However, the people who use these levies are private creditors and even the federal government. So, if these lenders ask for a levy with legal information about your debt, then your financial institution will put a hold on your account.
How Long Does A Levy Stay On Your Bank Account?
There is no particular date or time for a levy to stay on your account because it is only until you can pay off your debt with the creditor. So, if you are looking for a fast way to get rid of the levy, then paying off your debt faster is advised.
How To Find Out If There Is A Levy On Your Account
If you are still unsure of whether or not there is a levy on your account, the bank will give your creditor your contact details to your creditor. So, you might get a call or message from your creditor saying that you need to pay back the loan or money you owe.
What Do I Do If There Is A Levy On My Account
If there is a levy on your account, the only way for you to get rid of it is to pay back the money on your own. If you fail to do so, then you will not be able to access the account or the money in it until you do. What’s more, you can also go ahead and ask for a dispute to prevent your creditor from accessing all the funds in your account.
The steps below are some helpful ways to get rid of levies on your bank account:
- File for bankruptcy.
- Indicate that you are a sufferer of identity theft.
- Search for errors in the judgment.
- Create a brand new account.
- Issue a case of financial difficulty.
- Thrash out things with your creditor.
File For Bankruptcy
One of the best ways to get rid of bank levies on your bank account is by filing for bankruptcy. This will help you temporarily put a hold on collection efforts. However, this action enables the court to decide on which assets will be used to pay off the debt.
Indicate That You Are A Sufferer Of Identity Theft
If you do not have a hand in collecting a loan and defaulting, you need to allow your bank and the creditor to know that there has been a theft of your identity. Moreover, this often happens with debts on credit cards.
Search For Errors In The Judgment
Another defense against bank levy is by searching for errors in the judgment. And since everyone makes mistakes and no one is perfect, there is a chance that there may be a mistake or error in the judgment.
Create A Brand New Account
Opening a new account is a great way to remove levies on a bank account. So, if you have a levy on your account but still need money, then you can go ahead to open a new account. Moreover, you also need to stop making use of accounts with levies on them.
Therefore, until you are capable and ready to pay back the debt, you can be using your new account in the meantime.
Issue A Case Of Financial Difficulty
If your account has IRS levies, you can still issue a case of financial difficulty because they will give you a chance to defend the situation. However, ensure that you keep an eye out for mistakes by the court while making plans to pay back.
Thrash Out Things With Your Creditor
Speaking to your creditor and thrashing out things with them is one way that you can remove these actions from your account. So, when you talk to the lender one-on-one, you can be able to convince the lender to give you more time.
What’s more, if you are not financially capable, you can enjoy hardship benefits. But equally important, you and your lender can design a new repayment plan that works for both parties.
More Things You Need To Know
As soon as the lender gives your bank full information and details about your transaction with them, your account will be frozen by your bank. However, you may not receive a notification regarding this issue. The same goes for your creditors.
So, the purpose of a levy is to make sure that you pay up all of your outstanding bills one way or another. So, you can say that your creditor is ready to get the fund from you by crook or by the hook.
But if you have bills to pay, then you have the chance to dispute the levy. This is to avoid and prevent creditors from taking all the money in your account. So, without disputing, your creditor may leave your bank account empty.