Collection Attorneys Can Levy on Bank Accounts Shared with Third Parties

When a debtor’s assets are easy to find and obtain, collection attorneys may be of limited benefit.  But often times, debtors make things difficult for creditors.  In complex cases, an experienced collection attorney can make an enormous difference.  In Orange County and throughout California, The Wallin Firm is highly respected as a collection law firm and collection attorneys that aggressive enforce creditors’ rights, especially in complex cases.

As an example of a somewhat complex scenario, what happens when a creditor has obtained a judgment against a debtor and wants to perform a bank levy, but the deposit account or safe deposit box to be levied is held in the name of a third party?  The answer to this question depends on the circumstances.

If the account or deposit box to be levied is held in the name of a third party, then California law generally requires a court order specifically authorizing the levy on the third party.  CCP § 700.160(a).  However, a court order is not required for the creditor to levy on a deposit account or safe deposit box that is held in the name of any of the following parties:

• The judgment debtor, whether alone or with third persons;
• The judgment debtor’s spouse or registered domestic partner, whether alone or with other third persons
• A fictitious business name under which only the judgment debtor or the judgment debtor’s spouse or registered domestic partner are doing business; or
• The additional name of a judgment debtor listed on the writ of execution pursuant to an affidavit of identity, whether alone or with third persons. CCP § 700.160(b).

Among other things, this means that a creditor can in fact levy on an account held jointly by the debtor and a third party.  But, in order to be effective, the third party must receive a Notice of Levy at the time of levy or shortly thereafter by personal service or mail.  CCP §§ 700.010(a).  At the time of levy or promptly thereafter, the third person(s) in whose name a deposit account stands must be served at his, her or its residence or business address, if the levying officer is informed of this information by the person seeking the levy.  If service is not made in this manner, promptly after receiving a garnishee’s memorandum, the third person(s) must be served at his, her or its residence or business address as identified in the garnishee’s memorandum. CCP § 700.140(c)(2).  Moreover, the bank is entitled to hold the funds for an extra 15 days to allow the third party to file a third party claim against the levy action.  CCP § 700.160(c).

Though the process to obtain the lien can be relatively straight forward, third parties are often uncooperative and entitled to contest the bank levies enacted against them.  Having an attorney that understands the intricacies of the judgment collection process is important.  The Wallin Firm is experienced in this area and has successfully collected business debts in Orange County, Los Angeles County, Riverside County and throughout California.