Can a Creditor Levy a Bank Account?

Can a Creditor Levy a Bank Account More Than Once to Satisfy a Debt?

A creditor can levy a bank account more than once to satisfy a debt. If a creditor has a judgment against you, the creditor can direct a Court Officer to levy your bank account on multiple occasions, without notice, until a debt is paid in full.

Let’s back up for a moment and discuss how a creditor can levy your bank account. First, you need to be sued in Superior Court on the defaulted debt. Assuming that you do not defend the debt or enter into a Stipulation of Settlement with the creditor, a judgment will be entered against you. After judgment is entered, the creditor (or their attorney) will send you an Information Subpoena to fill out. It is required by law that you fill out the Information Subpoena. An Information Subpoena asks for a list of your assets such as your bank account(s) and employer. So, are you thinking that if you do not fill out the Information Subpoena that a creditor cannot levy your bank account? Think again. If you do not fill out the Information Subpoena, your creditor has the right to serve Information Subpoenas on all banking institutions. They will find your account information.

To execute on a judgment, the creditor applies for a Writ of Execution through the county Sheriff’s Office. The writ is then handed off to a Court Officer who serves it on the appropriate bank. The bank then levies your account leaving you with no funds and most often, an overdraft fee.

Can I Get The Levied Funds Back?

It depends (for the record, that’s my one of my favorite answers that lawyers give). If the Writ of Execution was handed off to the Court Officer within 90 days of a bankruptcy filing, you are entitled to a return of your funds. Outside the 90 day period, the creditor can keep the levied funds.

Under New Jersey State Law, you are entitled to a return of up to $1,000.00 of what was levied regardless of whether or not you file for bankruptcy. To get a return of up to $1,000.00 of the amount levied, New Jersey State Statutory Law applies. You will need to get the judge assigned to the Superior Court case to enter an Order for Exemption to Bank Levy. It is an Application for Relief under NJSA 2A:17-19.