When you enter into a debt agreement, your creditor has the right to sue you for the amount you owe if you do not pay. Creditors sometimes use a levy to collect the funds. This involves seizing property owned by the debtor.
Suing for a Judgment
Creditors cannot just take your property without going through the proper channels. The first part of the process is filing a lawsuit against you in civil court. At that point, the creditor will appear in court and show that the debt is valid. If you cannot prove otherwise, then the court may give a judgment to the creditor.
Getting the Writ of Execution
After obtaining the judgment, the creditor still must give you some time to pay the debt. In most jurisdictions, this is 30 days. After that time is past, the creditor can apply for a writ of execution with the court. This document allows the creditor to enforce the judgment with various techniques, one of which is a property levy.
Levy
With a writ of execution, a creditor can legally seize your property and use it to pay off the debt. One of the most common forms of levy is the bank account levy. The creditor finds your bank and provides the writ of execution. The creditor has the right to take money straight out of your bank account. Unless the funds are exempt, the creditor has the right to take all of the money in the account. Some examples of exempt funds would be disability payments and child support payments.
Stopping the Garnishment
If you are at risk of a bank account levy, you do not simply have to allow it to take place. One option is contesting the lawsuit. If you have evidence that shows you did not accumulate the debt, contesting the lawsuit can help you stop the garnishment. Another option is filing bankruptcy. By filing bankruptcy, creditors can no longer try to collect money from you. Another option is to stop using the bank account and live on a cash basis.
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