A bank levy is a court-sanctioned legal action allowing creditors to obtain money from your bank account when you fail to make payments. The creditor receives a court order, which freezes your bank account, and new money flowing through your account will go directly to the creditor who ordered the levy. If this has happened to you, consider hiring a bank levy attorney. Here are four situations where you may need to hire one.
1. Prove That You Are a Victim of Identity Theft
If another person fraudulently applies for the debt in question, you automatically become a victim of identity theft. You can fight the levy with the help of a bank levy attorney who assists you in proving that another person received the funds. Victims are advised to file a complaint to the Federal Trade Commission (FTC) through IdentityTheft.gov, print the Identity Theft Affidavit report, file a police report, and then attach it to the Affidavit. Your attorney can help you through this entire process.
2. File for Bankruptcy
If you file for bankruptcy immediately, you can recoup all or some of the money. The option varies from state to state and is supposed to be the last resort. If you can exempt the funds levied from your bank account, the creditor will then be forced to return the money to you. A bankruptcy lawyer will tell you whether all or some funds can be returned after filing bankruptcy papers.
3. Evaluate the Statute of Limitations
Creditors are given a specific time frame referred to as the statute of limitations to collect debts from clients legally. You must check the local and state laws depending on the type of debt you apply for. Reach out to a bank levy attorney if you need clarity or are unsure about the process. When the time frame passes, the creditor is barred from collecting funds from your bank account.
4. Prove That the Creditor Made an Error
Creditors are liable for making mistakes from time to time. You can send a debt validation letter through certified email if you believe the debt is not yours or the amount indicated is incorrect. The letter should clearly state that you are disputing the debt validity and would like documentation to verify it. Those who have already paid off their debt should find proof supporting their case. It can be in the form of a receipt, letter, or statement you received upon making the last payment.
You can then fight the levy with the help of a bank levy attorney if you do not owe the creditor any money. According to the IRS, the timeframe for filing an administrative claim against seizure by the IRS or a wrongful levy is two years. The period was nine months before 2018 and was extended to help clients navigate the process quickly.
A drained or frozen bank account is the last thing you may want to see. If the creditor levies your funds, it is crucial to understand that you can recoup your money, especially if you are a victim of identity theft or think the lender made an error. Hire Michael C. Whelan JD CPA to assist you with the next steps.