When you have to deal with a creditor to repay an outstanding debt, you may face the possibility of having money taken directly out of your bank account. When this happens to you, it can quickly deplete any savings that you may have built up in your account.
Garnishment vs. Levy
A garnishment is a process by which creditors take money out of your paycheck before it goes to you. A levy is a process that involves taking assets from you. This can occur by physically taking assets from your home or by taking money out of your bank account, depending on who sets up the levy.
Levying a Bank Account
If you find yourself in the position of owing an outstanding debt to a creditor, you do not have to worry about the creditor randomly taking money out of your account. Before the creditor can take money out of your bank account, it has to go through a specific legal process. This involves the creditor filing a lawsuit against you and then getting a judgment. Once the judgment is obtained, the creditor can then get a writ of execution which allows it to take money out of your account.
Amounts Taken
When a creditor decides to take money out of your account, you could potentially lose all of the money in your possession. Once the creditor looks at your bank account, it can take any amount up to the judgment against you. The creditor does not have to leave anything in your account to help you pay the rent or utilities. The creditor can tap all of the money as long as it does not exceed the judgment amount.
Exemptions
Although a dollar amount limit may not exist for how much money can be taken out of your bank account, certain types of money cannot be taken. For example, if you receive money from Social Security, the creditors cannot take this money. If you get money from disability, child support or alimony, this money cannot usually be taken by the creditor. To avoid having some of the money taken by mistake, you may want to keep it in a separate account.
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