- A writ of execution is a legal document issued by a court. This document gives the person suing you the right to come after property named in the writ. This is done with a levy. The company or individual has a sheriff present the levy to the bank and the bank must hold the money secure for the sheriff for a specific amount of time before it hands over the money to the sheriff. Banks must freeze your bank account immediately when they receive a notice of levy, but are normally not required to notify you if it is part of a private debt collection. However, you normally must be notified of the judgment during the collection process. A levy notification may be required if the issue is in connection with child support payments. Even if it is not required to do so, your bank may notify you anyway as a courtesy if it is part of the bank's own internal policy.
- You will be notified of a levy if it is for state or federal back tax collection. States may also mandate notification of a levy when the levy is for unpaid child support payments, but this depends on the state where you live. When a levy notification is sent to your bank, the bank must normally hold the funds for a set period. This time period varies by state but may be between three and four weeks. During this time, you may reply to the levy to prove that you are entitled to the money. If you cannot prove the levy should not have been placed on your bank account, your funds will be taken from you.
- There is little that you can do if you cannot prove that the levy is not valid. By the time it gets to the point where the levy has been issued to a bank, your only option is to pay the money if you legitimately owe it. If you were supposed to be notified of the levy, but were not, you can petition the court to set aside the judgment, but this won't guarantee that any funds already taken will be returned to you.
- Even though your only option is to pay the money owed, you may have several accounts to draw funds from. If you are able to sell investments or other assets to raise money quickly, you may contact your creditor to negotiate a payment. You must do this before the creditor decides to seize the funds from your bank account. The offer should also be made quickly and it must be attractive for the creditor, since it already has a levy on your bank account.
For IRS levies, the IRS will always notify you of the levy. It will specify the number of days you have to respond before it seizes funds from your account. During this time, you cannot access those funds in your bank account.
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