How to Get a Bank Levy Removed

A bank account levy gives the garnisheeing party the legal right to withdraw monies from your bank account to satisfy a debt you owe. The levy freezes your account: You can put money into it but cannot withdraw until the levy is removed. Creditors and debt collectors must obtain a judgment from a court to garnishee your bank account. However, the Internal Revenue Service, which uses the term "levy" when referring to a garnishment, does not need a court order to put a levy on your bank account. A bank levy is a last-resort method used to get you to pay your debt. In certain cases, you can remove it.

Instructions

1

Determine which agency imposed the levy. The IRS usually sends the debtor notice of the garnishment/levy. A creditor or debt collector must notify you of the lawsuit filed against you and the judgment obtained. Contact your bank if you changed your address and did not receive a levy notice. Ask the representative which institution issued the levy. The bank cannot remove a levy unless the issuing institution says to.

2

Review your financial statements to confirm that you actually owe the debt. If the bank levy was issued in error, file a claim with the court to recover all monies withdrawn, plus bank fees you incurred because of the levy. For an IRS bank levy, use IRS Form 8546 to apply for a reimbursement (see Resource).

Upon receiving the levy notice, your bank holds funds deposited into your account, up to the total you owe, for 21 days. Contact the issuing agency immediately if the levy was issued in error so the levy can be released before the holding time expires.

3

Contact the garnisheeing party and inquire about a payment plan. The IRS, creditors and debt collectors have payment plans available that require you to pay off your balance in installments. A bank levy is good for one withdrawal. If the initial levy does not cover the entire balance owed, the garnisheeing party must obtain another levy to garnishee again.

If you actually owe the debt, a payment plan does not reimburse you for monies already withdrawn. If you honor the payment arrangement, the garnisheeing party will not issue another bank levy against your account for the debt in question.