How Does a Bank Levy Work?
While the specifics vary by levy type and state, most bank levies follow a similar general sequence.
General Process
- A levy order is issued by the court (for judgment creditors) or the agency (for tax/government levies)
- The order is sent to your bank
- The bank freezes the affected funds in your account
- A holding period generally follows, giving you a window to respond
- If unresolved, funds are turned over to the creditor or agency
The Bank's Role and Obligations
Banks are generally required to comply with a valid levy order, freezing the specified funds and following notice procedures — the specifics vary by state and by the type of levy involved.
Notice Timing
Depending on the levy type, you may or may not be notified before the freeze actually happens — some levies come with advance notice, while the freeze on others takes effect before you're aware of it.