Enforcing a Judgment via a Bank Levy

You’ve been to court over a debt collection claim and lost. The court will not collect the money for the creditor. But the court will issue the orders and other documents required to force you (the debtor) to pay.

If the judge makes a decision in favor of the plaintiff, the plaintiff can start collecting the judgment right away as long as:

1. The judgment has been entered. You can check the court records to confirm that that the judgment has been entered; and
2. There is no stay (suspension or postponement) on enforcement of the order due to an appeal, a stay from a bankruptcy case, or other legal action.

Of course, the creditor cannot use illegal ways to collect the judgment and as a debtor, you may be protected from abusive or unfair ways to collect the debt.

To collect the debt, the creditor should NOT:

• Lie or make misleading statements to collect a debt;
• Harass you;
• Ask another person for more than basic information about where you are;
• Tell your employer or other people that you owe the creditor money (except when the creditor gets an earnings withholding order from the court); or
• Get in touch with you before 8:00 a.m. or after 9:00 p.m. or at any time or place that is not convenient.

Here’s what to expect once a judgment has been entered:

1. Identify the name of any and all banks in which an account is held in the name of the Judgment debtor. Subject to certain exceptions, a bank account in the name of a person other than the debtor is not subject to bank levy. The most common exception is the debtor’s spouse or registered domestic partner, whether alone or with other third persons.
2. Obtain an issued Writ of Execution from Court. A separate Writ is required for each county in which a bank levy will take place.
3. File the original and copies of the Writ as well as Sheriff’s Instructions with the Sheriff’s Department. Each Sheriff has its own procedures for a bank levy.
4. Personally serve copies of the Writ, Notice of Levy and Memorandum of Garnishee on each of the banks.
5. Serve (personally or by mail) a copy of the Writ and Notice of Levy on the debtor. If the debtor is a natural person, also serve a list of exemptions, Claim of Exemption forms and any affidavit of identity (if applicable).
6. Upon receipt of the levy documents, the bank is required to freeze the debtor’s accounts subject to certain exempt federal benefits in which the debtor retains access to the exempt funds.
7. Within 10 days, the bank should complete the Memorandum of Garnishee (indicating how much money was obtained) and return it to the Sheriff. The Sheriff will inform the Judgment creditor of the same.
8. In California, there is an automatic exemption amount of $1,826.00 pursuant to CCP §704.220. This amount is adjusted annually and is effective until June 30, 2022.
9. The debtor may file a Claim of Exemption within 15 days of being served (or 20 days if served by mail) with the Sheriff. If the creditor does not file a Notice of Opposition to the Claim of Exemption with the Sheriff and Court (and reserve a hearing date) within 15 days, the Sheriff releases the funds back to the bank.
10. If the debtor fails to file a Claim of Exemption, the Sheriff delivers the funds pursuant to the Sheriff’s Instructions.