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katousa

Bank levy - who knows how much $ is on my account? - CA

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I live in Los Angeles, CA and I'm a single mom. About a month ago my bank called and informed me that they received a writ of execution (money judgement) and my account was put on hold. They faxed me the paperwork and surely I found out that there is a default judgment against me. I was never served with the summons so that I could appear on court. I immediately filed a claim of exemption and a motion to vacate.

I even called the debt collectors and tried to settle but never heard from them. I don't admit that I owe them anything, but I don't want the burden of going to court and spend time on paperwork. Thus I figured I'd settle with them. The levy is for $4,400 and I offered them $1,000.

The fact that they're not willing to settle makes me believe that they must know how much money is on my bank account and since they have a levy, they figure that they've won it all.

My questions are:

Does the judgment creditor knows the amount of money you have in the bank?

Does the sheriff know?

What kind of information does the judge have access to in regards to bank accounts?

Does he also know how much money is in your bank account?

My earnings are deposited to a checking account weekly and I frequently transfer money to a savings account from there.

Questions:

Is is true that 75% of that is exempt from the levy?

75% of what income is exempt? Accumulated income or income during a certain period of time?

Are federal and state tax return considered income, therefore 75% exempt?

Where does my money go to after a levy is issued?

If I get the claim of exemption accepted, what is the procedure for getting my money back and how long does it take?

If I lose on the hearing for claim of exemption, where does my money go, since I have the hearing for vacating the judgment coming up 3 days after?

What happens if I manage to vacate the judgment? How and when will I get my money back?

Any advice would be greatly appreciated.

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Please tell me that you are not still having your money direct deposited into this same bank account. You do realize there is no law that forces you to not close the account and or open a new account, or even get one of those pre-paid debt cards for 7.95 a month to have your pay direct deposited.

That is a ton of state specific questions where if you Google it, there is probably one court or state of CA dept site that has them all under FAQ'S.

However, when you go to court they will probably put you under oath and ask you questions.

I don't think the bank tells anybody how much is in there. However, I can figure out how much somebody has in any account just by calling the bank and telling them I have their customer here writing me a $500.00 check and I know they can't tell me the balance but will the check clear.

Then if they say yes, call another branch, rinse and repeat and just say I have a check for $600.00, then if they say yes, go up $100.00 each time until they say no, then drop it by $50.00, then $25.00 until I can figure it out to the dollar if I want.

If I could figure that out in college when trying to figure out which weekly poker losses checks from the donators would clear, I'm sure a collection agency can figure it out. Well I take that back, most are not as smart as a bunch of drunken college guys betting $200.00 if the next card turned will between a 4 and a jack.

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Coltfran1972, thanks for the response.

Well, I no longer have much money left on that same account and I don't know if closing it would do any good. It sounds like they could find out about the new account anyways.

As to the answers to my questions, I tried to google them but I didn't find any answers. The justice system makes sure that the person being sued has a tough time to defending themselves. It's all designed so that you end up hiring an attorney so will end up paying anyways. It sucks!

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It sounds like they could find out about the new account anyways.

Exactly, that is why I suggested a pre-paid debt card that accepts direct deposit (there are tons of them out there) that they won't be able to touch. Yes, it will cost about $7.95 a month but sounds worth it.

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https://www.greendot.com/greendot Get them at Walmart and most stores.

Exactly, perfect one to use right here. There is no law that requires a person to be a sitting duck just ready for the other side to pick off when they are ready to start firing.

Getting sued or even losing a lawsuit does not mean you turn in your common sense and will to fight card, it just means you fight harder and smarter so you don't lose next time.

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Ok. So I looked into the alternative to savings and checking accounts. The problem with prepaid money cards is that according to their privacy policy and terms of card agreement they don't protect your information from being shared and since you need to give out your SSN to obtain a card, basically it would be just as simple for a credit collection agency or creditor to find out about your money card as it would be to find out about your bank account. On top of it, you have to pay a recharge fee (except for direct deposit of your earnings) and a transaction fee for each purchase. It doesn't sound like a good alternative to me. Just my 2 cents.

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You've talked yourself into not fighting them and that's fine. It's not a fun thing to do. But for others that might be reading, "basically it would be just as simple for a credit collection agency or creditor to find out about your money card as it would be to find out about your bank account."

That is not even remotely accurate. It's anything but "simple" in fact it's virtually impossible for a collection agency to find out. They would have to get a court order and start randomly trying to locate the money on a pre-paid debit card. It's not like the pre-paid card is just going to post the customers on their website. If you look at every privacy policy they pretty much all say that.

It does not mean if somebody calls them up is they are going to give them info. It means they will share it with their other companies they most likely own or of course if they are legally required. In other words they are not going to act as an offshore tax shelter or a Swiss bank account.

The reason they got you the first time is they probably sent out a levy to all the local banks in your area, or in the past you had made some payment using that bank account so they knew where you banked.

You're in California, open a bank account in West Virginia at a bank that only does business on the east coast. Then do your banking online or pay the $2.00 fee if you just have to use your debit card to get cash at a local ATM.

On top of it, you have to pay a recharge fee (except for direct deposit of your earnings) and a transaction fee for each purchase. It doesn't sound like a good alternative to me.

Considering the alternative that they already have a levy on your bank account, they know you have money in there, and your having more money deposited via direct deposit into that account which they already know about and are levying, including you already having notification from the bank, I fail to see how possibly losing your money out weighs guaranteeing you lose your money, but that's just me.

Whatever works for you.

Good Luck !! but there are tons of ways around this.

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California Code of Civil Procedure Section 700.140© states that once the bank is notified of a levy, it is not allowed to honor any check or other form of withdrawal from the account while the levy remains in effect. Deposited funds that have not yet cleared to the account at the time the levy takes effect cannot be credited to the account for purposes of withdrawal while collection efforts are ongoing. The amount of the levy, or the total proceeds in the account, whichever is less, are paid to the sheriff. Once the payment is made, the levy is lifted.Section 700.140 (d) actually protects the bank from liabilities incurred as a result of the levy. The bank is not liable for nonpayment of a check or other demand for payment, or for failure to honor any withdrawal request. Section 700.140 (e) exempts certain types of accounts from levy. The exempted accounts payable-on-death accounts, such as a Totten trust, for which the debtor is a named beneficiary or payee.

Edited by racecar

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California Code of Civil Procedure Section 700.140© states that once the bank is notified of a levy, it is not allowed to honor any check or other form of withdrawal from the account while the levy remains in effect. Deposited funds that have not yet cleared to the account at the time the levy takes effect cannot be credited to the account for purposes of withdrawal while collection efforts are ongoing. The amount of the levy, or the total proceeds in the account, whichever is less, are paid to the sheriff. Once the payment is made, the levy is lifted.Section 700.140 (d) actually protects the bank from liabilities incurred as a result of the levy. The bank is not liable for nonpayment of a check or other demand for payment, or for failure to honor any withdrawal request. Section 700.140 (e) exempts certain types of accounts from levy. The exempted accounts payable-on-death accounts, such as a Totten trust, for which the debtor is a named beneficiary or payee.

Exactly, and the perfect reason you don't want to pump more money into an account that already has a levy on it.

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Exactly, and the perfect reason you don't want to pump more money into an account that already has a levy on it.

I am trying to avoid filing bk at all costs. I know I will probably lose my case as the plaintiff has filed for MSJ. I figured the judgement would go to either a bank levy, wage garnishment or property lien. The bank levy scared me more than the others...so I had no idea about being able to change the bank accounts. I wonder if I do this prior to them being awarded a judgement, I would be way ahead of the game? Hmm....xangelx

Who mandates how they enforce their judgement? The court? If the bank levy doesn't satisfy their award, do they just keep throwing darts until something sticks???

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This is how the bank levy generally works in CA -

Once the bank receives the levy, they will immediately freeze the account and assess it for 2x the judgment amount. The $$ is held for 21 days for you to contest the levy with the court - SS / disability $$$ is exempt and cannot be touched.

So do as Coltfan suggests and get another account - I highly recommend a small community bank or CU - and not one near where you work or live. A lot of times, they will find all banks/CUs by where you live or work and hit them with a levy and hope it works.

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I am considering opening a new bank account as a preemptive strike against a bank levy. I have read that you don't want to open a new account near where you live or work. What about internet banks such as Ally?

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It seems to me that any bank account can be levied. This also includes PayPal, as I have seen levy notices appearing on a PayPal account that debtors have posted on the Internet. :evil:

There are secured credit cards, too, in which you send in $500 and they give you access to your own money. Since a secured credit card is in effect a bank account with access via MasterCard, Visa, or Cirrus/ATM, then the amount deposited for a secured credit card can be levied.

The "prepaid" debit cards are a different animal. Read all of the fine print of the Walmart MONEYCARD cardholder agreement. One of their criteria is that this card is available to minors, and it is pretty accessible at thousands of stores. THERE IS NO MENTION of the possibility of levy on this card's balance. In fact, if you don't register the card in your name (and social security number) then they don't even know who the funds belong to. So you can be very, very paranoid and never tell them who the cardholder is. If you don't register the card, you better not lose it or get it stolen, because it might be impossible to recover funds. So it may be better to register it and see how difficult it is for a levy to occur.

Reference (not a good URL so remove the extra space):

walmartmoneycard .com /walmart/cardholder-agreement

88-)8-)88-)

Now, as for the actual discovery of which bank you have funds deposited in.... Unless you volunteer this info at a hearing or in paperwork in which the court threatens you with contempt unless you fill it out truthfully, there is a mystery as to where your funds are. You could try using a friend's bank account and borrowing their debit card... or you could try out a non-local bank. Back in my younger years, I moved and maintained an account with a bank in which there were no local branches, so I would simply mail deposits to them and access my account from afar. I did it for a few years. It works okay, but direct deposit is a kicker so be careful. Whatever you do, make it a mystery to the casual collector, and change your formula periodically, and try multiple stashes if you have enough cash flow.

8-)

Just as an aside, judgments are no guarantee of levy. Not only can you claim a lot of exemptions if they do find your account, the fact is that shotgun levy of 10 local banks is incredibly expensive. So even moving to a smaller bank can make the creditor's job difficult. Watch out for where you get printed checks from, because the large check printing companies may be forced to tell a creditor what your most recent bank & address you used since this is tied often to a SSN on file. So maybe skip the "free" checks when you open a checking account.

As other have mentioned, once your creditor finds the bank account, you have no obligation to keep depositing money there. Immediately stop all activity there and go to another method of money management. Direct deposit and recurring payments need to be stopped fast, and of course any bank loan at the frozen account's bank will be a nightmare. This is why it can be convenient to have loans from one source and checking accounts from someplace else. You just found out the hard way if this happens. Heaven forbid if (for example) Bank of America was where you had a car loan, checking, home loan, etc, and then you get levied. You need to call a bankruptcy lawyer.

Speaking of cars, :commute: there is some difficulty in garnishing a vehicle because of all of the fees, exemptions, prior liens, and the low auction prices. Unless you own a newer vehicle or at least a valuable vehicle, the collector will get very little of the proceeds if they have your car seized by the sheriff. If your car is worth less than $5000, it may be a bad target for the collector. If your vehicle is paid for and is worth $10,000, then watch out. Albeit a slow process, a decent vehicle is worth seizing and auctioning, especially if you park it in a driveway or on the street. Remember that although some of the value of a car belongs to you (if your state has this exemption for $3000 to $6000, for example), you only get this money after the auction as a statutory lien on the auction sale. So this could be months after seizure. Ideally, if you have an expensive car, sell the car, get some cash to buy a clunker, and then settle the judgment for pennies on the dollar. You don't want the sheriff doing it for you.

Don't let this be you: :commute:

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