Bank Levy.

In plain English

A bank levy is when a creditor or government agency legally takes funds directly out of your bank account to satisfy a debt you owe. For most debts, the creditor must first sue you, win a court judgment, and get a court order before the bank freezes and hands over the money. Tax agencies like the IRS can levy with their own legal process. Some funds, such as certain Social Security, veterans, and other federal benefits, are protected and cannot be taken, and your state may protect more. If your account is levied, you have the right to be notified and to file an exemption claim to get protected money released.

01Why it matters

A levy can drain your account without warning, bouncing your rent and other payments, so knowing which funds are protected and how to claim an exemption is your first move to get that money back.

02The math, step by step

A creditor wins a judgment for 1,500 dollars and serves your bank with a levy. The bank freezes that amount. If protected benefits like Social Security were direct-deposited in the last two months, federal garnishment rules require the bank to review the account and automatically protect up to two months' worth of those benefits, and you can file an exemption claim for the rest. Your first step is to read the notice and claim every exemption you qualify for before the deadline.

03What this is NOT

04Receipts

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