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You may be confused and stressed when you get a bank levy. Many people wonder: is a bank levy a one-time thing, or can creditors keep taking money out of my account over and over?
Unfortunately a bank levy is usually not a one-time thing. Creditors can continue levying your bank account until the debt is fully repaid. However, there are some steps you can take to protect your money and dispute improper levies. Keep reading to learn more about how bank levies work and what you can do if your account is levied.
What is a Bank Levy?
A bank levy allows creditors to seize money directly from a debtor’s bank account. It is a legal enforcement process that creditors use as a last resort to collect unpaid debts.
Here’s a quick rundown of how a bank levy works
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The creditor sues the debtor in court for repayment of the debt. If the creditor wins, the court issues a money judgment stating how much is owed.
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Using the judgment, the creditor can request a writ of execution from the court authorizing seizure of assets.
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When the writ is given to the sheriff or levying officer, they serve it on the bank that holds the debtor’s account.
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The bank freezes the account and sends the levied funds to the creditor to pay down the judgment.
As you can see, a bank levy is a serious collection method that can wipe out money in your bank account. Creditors don’t use it lightly given the time and legal costs involved.
Can Creditors Levy My Account Repeatedly?
Most of the time, one bank levy does not fully pay off the debt. Yes, creditors can keep taking money out of your account until the judgment is paid.
The creditor can’t take more than what you owe on the judgment. But if the debtor feels like they can’t fully repay the debt the first time, they can keep coming back with new bank levy orders.
Each bank levy only seizes the money in your account at the exact time the levy is served. It does not put a long-term hold on future deposits. So creditors have an incentive to keep levying your account when the balance may be higher.
Some creditors even use services that monitor bank account balances and automatically generate a levy when the balance reaches a certain level.
The good news is that each new levy does require court approval and proper notice to you and the bank. But creditors can repeat the process as often as needed until the judgment is paid.
How Long Do Bank Levies Last?
Bank levies can remain in effect until the creditor seizes enough money to satisfy the debt. But each individual levy generally only lasts 10-21 days.
Here is the basic timeline when your account is levied:
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Day 1: The levy order is served on the bank. Your account is frozen.
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Days 2-15: The bank reviews your funds to determine if any are exempt. You are notified of the levy and can file exemptions.
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Day 16-21: Exemption disputes are resolved. Exempt funds are released back to you. Non-exempt funds are sent to the creditor.
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Day 21: The single bank levy order expires. However, the creditor can get a new order any time until the debt is paid.
As you can see, each levy itself is short-lived. But over the course of repaying the debt, your account can be levied multiple times.
Protecting Your Money from Multiple Levies
If your bank account has been levied, all hope is not lost. Here are some tips to protect your money from excessive account freezing and levies:
Review the judgment for errors. If the creditor made a mistake in calculating what you owe, you may be able to dispute the judgment and levy.
Claim exemptions. Certain funds like Social Security, disability and child support are exempt from bank levies. File an exemption claim form immediately.
Open a separate exempt account. Deposit exempt funds like Social Security into a separate bank account that creditors cannot levy.
Get legal help. An attorney can help you negotiate with the creditor or identify defenses against the judgment and levy.
Try to settle the debt. Offer the creditor a lump sum payment that is less than the amount owed. Settling removes their right to further levies.
File for bankruptcy. Bankruptcy stops all collection efforts, including IRS levies. Chapters 7 and 13 can eliminate eligible debts.
Act quickly if levied again. You normally have 10-20 days to claim exemptions before the creditor gets your money.
While a bank levy is not always a one-time event, you have protections. Seeking legal help quickly can be key to defending your bank account. With the right strategy, you may be able to avoid recurring levies and settle debts on affordable terms. Don’t wait to protect your hard-earned money.
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During times of financial hardship, it’s not uncommon to fall behind on regular bills and debts you owe. But if you don’t pay your bills on time for a long time, you might have a bank levy. This is when any money you have in the bank is “frozen” and you can’t use it.
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Katherine Peach has been a personal finance writer since 2007, with a focus on investing, saving, budgeting and paying off debt.
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Calendar Icon 6 Years with Bankrate Calendar Icon 10 Years of editorial experience Aylea Wilkins has been at Bankrate since 2019, editing content in student, personal and home equity loans and auto, home and life insurance before taking on editing content in a variety of other categories.
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Thomas is a well-rounded financial professional, with over 20 years of experience in investments, corporate finance, and accounting. His investment experience includes oversight of a $4 billion portfolio for an insurance group. Varied finance and accounting work includes the preparation of financial statements and budgets, the development of multiyear financial forecasts, credit analyses, and the evaluation of capital budgeting proposals. In a consulting capacity, he has assisted individuals and businesses of all sizes with accounting, financial planning and investing matters; lent his financial expertise to a few well-known websites; and tutored students via a few virtual forums.
At Bankrate, we take the accuracy of our content seriously.
“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
Their reviews hold us accountable for publishing high-quality and trustworthy content.
Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Heres an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy. Bankrate logo
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo
How Long Does an IRS BANK LEVY Last?
FAQ
How many times can a bank account be levied?
Levies can happen more than once and may continue until the outstanding debt is fully paid. Banks and creditors aren’t required to notify you before freezing your account, which can make levies feel sudden. That said, you may have defenses if you believe the levy was issued in error or if exempt funds were taken.
Are bank levies one time?
Bank levies are one time actions – The bank only takes out money one time for each levy. They do this when they get the levy.
Is a tax levy a one-time thing?
Most levies are one-time events at the time of the IRS order. However, some types of levies are recurring, such as wage garnishments.