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

Can you force a sale of real property?

One of the first steps you take after obtaining a judgment is to record an abstract of judgment in each county your judgment debtor owns property. Recording an abstract establishes a lien on the property and prevents your judgment debtor from selling or refinancing their property without your consent.

In many instances once you’ve taken this step you can sit back and let the judgment accrue interest at 10% per year and wait until the judgment debtor attempts to sell or refinance property. Sometimes a more aggressive approach is warranted to force the sale of the asset. The best tool to do this is to levy the property with a writ of execution to initiate a sheriff’s sale. A sheriff’s sale is an expensive and time consuming process but if done correctly under the proper circumstances, it is a powerful tool. This post details the steps you should take to determine whether a real estate levy is a viable option for your case.

The property pictured in the header of this post is a 4 bedroom 3.5 bath home of over 6,000 square foot on .97 acres in Pleasanton (East Bay) California. It was sold by Alameda (Oakland) Sheriff’s Department on an execution sale directed by my office. It sold for over 2.5 million dollars.

A real property levy can only be used when the judgment debtor has equity in the property over the liens senior to your position on the property. Put simply: if the property is sold, all lienholders ahead of you have to be paid in full before any money can go towards the satisfaction of your judgment. You will not be able to obtain an order from the court to allow the sheriff to conduct the sale if the sale would not produce any funds to satisfy your judgment.   The first step is to determine if you would get any money from the sale of the property is to determine what liens have a higher priority than you.   To do this you should conduct a public records search to see what, if any liens are on the property recorded prior in time to the abstract of judgment you have recorded in the county where the property is located.  

When you have determined which liens are ahead of you the next step is to determine the balance of each lien.   If you have recorded an abstract on the property, Civil Code 2943(a)(5) allows you to send a letter to any senior lienholder to obtain a payoff statement of their lien within 21 days of the letter.  After you have determined the balance of the senior liens you need to determine whether a disabled veteran exemption or homestead exemption applies.  A homestead exemption is either recorded or can be claimed, if the exemption is claimed the burden of proof is on party claiming it but you must make your own decision prior to taking the next steps on whether you believe the exemption applies.  Additionally, the amount of homestead exemption differs in family circumstances and when you first obtained your lien on the property.  If the lien is first recorded prior to 2021 the amount is significantly smaller.   Next, you need a rough estimate of the Fair Market Value of the home.  Using all the information you have obtained you should have an idea of whether there is equity or not in the property and whether you want to proceed with the next very expensive steps.  If there is a homestead exemption present on the property, the sale price of the home can be no lower than 90% of the fair market value.

If you have determined there is equity in the property you are now ready to proceed with steps necessary to levy the property and obtain an order for sale from the court.   Part II of this post will detail the levy process and obtaining the order for sale.