Can a Debt Collector Put a Levy on a Bank Account?

Debt collectors can generally place levies on bank accounts, but only after the debt collector follows the appropriate court procedures and obtains an order from a state court judge. This requires several procedural steps in court, and you will be able to defend yourself and have notice of any action along the way.

Complaint

Before a debt collector can levy your bank account, it must file a lawsuit against you. A lawsuit begins when a debt collector files a form "Complaint" in state court. The debt collector will serve you a copy of the Complaint, along with a Summons, and you will have about 20 days to file an Answer to Complaint, if you want to.

Lawsuit

If you don't file an Answer in response to the Complaint, then a lawsuit will not be necessary. The debt collector will obtain a default judgment against you based on whatever the debt collector alleged in the Complaint. However, if you file an Answer protesting the debt, then the debt collector will have to carry out a full lawsuit against you, which could potentially require a trial before a judge or jury.

Judgment

At the end of a lawsuit, if the debt collector is successful, it will obtain a judgment against you. The judgment is an order from the court directing you to pay a certain amount of money to the debt collector. Most of the time, the judgment will include the original amount of the debt owed, plus attorney's fees, court costs, and interest. Without a judgment in hand, a debt collector cannot place a levy on your bank account.

Supplemental Proceedings

Even after the debt collector obtains a judgment against you, it still does not have the automatic right to levy your bank account. Instead, the debt collector will have to apply to a state court judge for a writ of execution or garnishment. These writs are orders from the judge allowing the creditor to levy your bank account. Creditors are not allowed to levy your bank account if it is your only means of survival. If that is the case, you should attend the supplemental proceedings regarding the writ so that you can inform the judge that taking the bank account would deprive you of your ability to cover your basic living needs, such as food, clothing, transportation, and shelter. The supplemental proceedings will take place after the creditor obtains a judgment against you, but before the creditor levies your bank account.