Let's Go to the Mall...for a Bank Levy

How to Levy a Bank Account in California

I am a huge fan of the TV show How I Met Your Mother. Whenever I hear about something associated with malls, I immediately think of Robin Sparkles' hit song, "Let's Go to the Mall." But now I like malls for another reason: I can have a major bank served with a bank levy there. How is that possible? I'll get there, but first, let's discuss the process of levying a bank account.

How to Levy a Bank Account

Once you have obtained a judgment, the basic process for levying a bank account is as follows:

1. Figure out where your debtor banks. There are several ways to go about this, but I am not going to get into that in this post. Once you have determined where they bank, you must check the State of California's website, which identifies the proper branch to serve bank levies here Bank Levy Central Branch Locator.

2. Obtain a writ of execution for the county that has the correct bank branch. 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.

3. 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).

4. Once the levy is served on the proper bank branch, 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.

5. 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.

If you need help levying a bank account contact us HERE

Enforcing a Judgment with a Bank Levy

One of the most common tools to enforce a judgment is to levy a bank account.  A levy is a process where you serve your debtor’s financial institution (they can be used for credit unions too) and it captures all the money in the account at time the levy is served (less automatically exempt funds like social security or disability payments).  

To use this judgment enforcement tool, the first thing you would need to do is to determine where your judgment debtor banks.   There are many avenues to accomplish this. One example is, if you have a credit application from your debtor it will likely include this information.   Another example, if you paid your judgment debtor in the past, or they paid you, you can check cancelled checks or ACH’s to determine this.   As a last resort, if you don’t have any information you can serve the judgment debtor with an order to appear for an examination (See past blog: The Detective Aspect of Collecting), or to hire a skip tracer to do a bank account search.   

Once you’ve determined where they bank, you must find the proper place to serve the levy. 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, even 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. California law now requires financial institutions to designate a central location for bank levies to be served. This accomplished by checking: www.dbo.ca.gov/Laws_&_Regs/legislation/service_of_legal_process/. If the financial institution doesn’t designate a central location, you can serve levies at any branch in the state. In the case that the institution doesn’t have a central location, I recommend that you avoid serving bank levies in the Bay Area, Sacramento, or Los Angeles.

Next, you need to obtain a writ of execution for the county you want to serve the levy in. 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, but instead 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 individual counties may have different levy instructions and require particular 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 The Nuts and Bolts of 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, who 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, the bank has a certain time period in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and in that case 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.