Orange County Bank Levy Lawyer

Bank Levies as a Business Collection Tool

innerBank levies can be an extremely effective judgment collection tool.  A bank levy removes funds from the debtor’s bank accounts and delivers the funds to the creditor.  If a levy is made on an account containing enough money to satisfy the judgment, the creditor can receive full payment by this one collection method alone.  Even if no large bank accounts can be found, bank levies often disrupts the debtor’s life and/or business, and acts as a major “wake up call” for the debtor.  The effectiveness of bank levies hinges on whether the creditor can locate the debtor’s accounts.  Fortunately, a new California law makes bank levies far more effective and less expensive (see below).

Need Help Executing a Bank Levy in California?

If you have questions regarding bank levies in Orange County or elsewhere in California, please contact us at (949) 203-3870.  We are happy to discuss your Orange County debt collection matter.  Our firm helps creditors quickly find and levy on debtors’ bank accounts.

The Wallin Firm is dedicated to collecting large debts from businesses and individuals throughout California, with an emphasis in Orange County, Los Angeles County, Riverside County, and San Diego County.  We understand that collecting is extremely important to our clients, and we take our responsibility very seriously.  Please contact us for a complimentary analysis of your judgment and collection options.

 

How to Collect Judgments via Bank Levies:

  1. To conduct a bank levy, the creditor must first obtain a writ of execution from the court. See CCP § 699.520.  A separate writ of execution is required for each county in which a levy will take place.
  2. After the writ of execution has been obtained, the creditor must deliver the original writ of execution to the sheriff’s department for the subject county. See CCP §§ 700.140(a), 700.150(a).
  3. Each county’s sheriff’s department has its own procedures for bank levies, but most allow bank levies to be conducted by registered process servers.  If so, the creditor can effectuate the bank levy by, first, delivering the original writ of execution to the sheriff’s department, along with instructions detailing the banks to be visited, and second, instructing the process server as to which financial institutions to serve.
  4. Next, the process server will serve a copy of the writ of execution on each of the banks, along with a Notice of Levy and Memorandum of Garnishee.  A separate Notice of Levy is also sent to the debtor, informing him that the levy has taken place.
  5. Immediately upon receipt of the levy documents, the bank is required to freeze all funds in the debtor’s accounts (up to the full amount of the judgment).
  6. Within 10 days of receipt of the Notice of Levy, the bank will complete the Memorandum of Garnishee (indicating how much money was obtained) and return it to the sheriff.  The sheriff will then inform the creditor as to the amount of funds, if any, obtained.
  7. Finally, the bank delivers the funds to the sheriff, who then forwards the money to the creditor.  See CCP § 701.030(a).

 

When to Use a Bank Levy to Collect a Judgment

Creditors should execute bank levies immediately if the creditor knows the banks at which the debtor maintains accounts.  If the debtor has made payments to the creditor in the recent past, the bank from which such payments were made is often the best place to start.  If no accounts are known, the creditor can attempt to learn of the debtor’s accounts by obtaining an asset search and/or conducting a judgment debtor examination.  With respect to asset searches, certain law firms (including our firm) have negotiated much-reduced rates with excellent asset search companies.

 

Common Bank Levy Challenges

In addition to potential difficulty identifying the debtor’s bank accounts, an additional challenge stems from the requirement to obtain a separate writ of execution in each county in which a levy will be effectuated.  Historically, bank levies served to sweep only the funds located at the specific branch of the bank served with the levy (leaving the debtor’s accounts at other branches untouched).  As a result, if a creditor sought to levy on three bank branches located in three different counties, the creditor was required to obtain multiple writs of execution (one for each county), communicate with multiple sheriff’s departments, and engage multiple process servers.

 

New California Bank Levy Law Makes Collection Easier

As of January 1, 2013, bank levies are more effective and easier to execute.  A new law, California Assembly Bill 2364 (Chapter 484 on September 23, 2012), requires financial institutions to designate a central address for service of all levy-related documents.  Service on the bank’s central address now serves to sweep all of the debtor’s funds at any branch throughout California.  In the past, funds were swept only from the specific branch at which the levy-related documents were served (leaving the debtor’s accounts located at other branches untouched).  Many of the largest banks in California (e.g., Bank of America, Chase, U.S. Bank) have designated central addresses in Los Angeles County.  This means that creditors can now levy on all of the debtor’s accounts at several large banks by obtaining only one writ of execution (in Los Angeles County), communicating with only one sheriff’s department, and engaging only one process server.

In certain circumstances, the new law also makes it cost-effective to levy on several large banks without first investigating the location of the debtor’s accounts.  Even if a creditor does not know where the debtor banks, the creditor can “play the odds” that the debtor maintains one or more accounts at the largest banks, then levy on such banks.

 

Contact The Wallin Firm Today for a Judgment Review

Virtually every creditor is well served to execute bank levies quickly.  Please contact us to discuss how we can identify and levy on your debtor’s bank accounts.  In most cases we can execute bank levies in less than one week from engagement.

The Wallin Firm prides itself on doing everything needed to maximize the likelihood of collecting our clients’ judgments.  We are happy to speak with you.  Feel free to contact us at (949) 203-3870 for a complimentary review of your judgment and collection options.

 

Important additional details re bank levies:

  1. Writs of execution are valid for only 180 days. See CCP § 699.530(b).
  2. Process server fees can be expensive, particularly if the creditor attempts the “blanket” bank levy strategy described above.  However, certain law firms (including our firm) have negotiated much-reduced prices with excellent process servers.
  3. Alternatively, the creditor can instruct the sheriff’s department to effectuate the levy (i.e., the sheriff will serve the banks directly, without the use of a process server).

 

References & Helpful Links:

  • Collection Analysis
  • Complete for a Judgment Collection Analysis