One of the best tools to collect a judgment is a bank levy. The first thing we have to establish is what is a bank levy? It is an order to take all the money up to the amount of the judgment out of a judgment debtor’s bank account. It takes what is in the account immediately at the time the levy is served on the bank. There isn’t a continuing hold on the account.
Here’s the basic process once you’ve obtained a judgment. First figure out where your debtor banks. There are several ways to go about that, but I am not going to get into that for this post. Once you’ve determined where they bank, you must check the State of California’s website, which identifies the proper branch to serve bank levies (www.dbo.ca.gov/Laws_&_Regs/legislation/service_of_legal_process/).
California law now requires financial institutions to designate a central location for bank levies to be served. If the financial institution doesn’t designate a central location, you can serve levies at any branch in the state. When I first started practicing law, if you wanted to do a bank levy you had to serve it at the branch at which the account was opened in order for it to be effective. So if you knew that your debtor had money at a big bank like US Bank or Bank of America, you would still have a difficult time hitting on a levy.
Next, obtain a writ of execution for that county. As I discussed in my nuts and bolts of wage garnishment post, the judgment is not the instrument that you need to do bank levies. A writ of execution is the document needed. A writ of execution can be issued for each county in the State of California. Writs are valid for 6 months and can be renewed as long as your judgment is valid. In California, judgments are valid for 10 years and are infinitely renewable.
Finally, you must send the writ with levy instructions to the sheriff of the county. This is another situation where different counties have different instructions for levies and require different things to be submitted. The best source to figure out what is necessary to be submitted is the website of the county sheriffs. Some counties do not have any instructions at all. In that case, you must write your own. We make sure that we keep templates saved for each county in our forms library for quick access. As I mentioned in the wage garnishment post, some county sheriffs will not serve bank levies. In that situation, or the situation where the county sheriff is overwhelmed, which is sometimes the case in Los Angeles and Sacramento, you hire a private process server to serve the levy. You would still have to have the process server open the levy with the sheriff, which is the official levying officer (where the return to the levy must be sent and funds from the levy must be sent). Once the levy is served on the proper bank branch, then the bank has a certain time in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and we will have to send them a friendly reminder that they need to respond or face a creditor’s lawsuit.
Once they respond with information on the levy, the judgment debtor is notified of the levy, and they have a certain period of time to claim the funds exempt. Once that time passes, if no claim of exemption is filed, then the bank turns the money over to the sheriff, and then the sheriff cuts us a check.