One of the biggest concerns for consumers facing debt collection is whether a collection agency can freeze or levy their bank account. At The Wood Firm PLLC, we help consumers understand their rights and fight back against unlawful debt collection tactics.
If a collection agency is threatening to take money directly from your bank account, here’s what you need to know.
Can a Debt Collector Legally Levy My Bank Account?
A collection agency cannot levy (freeze or take money from) your bank account unless they first sue you and win a judgment against you in court.
The Legal Process for Bank Levies:
- Debt Collector Files a Lawsuit – The collection agency must sue you in court for the debt.
- They Must Win a Judgment – If they win, the court issues a judgment against you.
- They Request a Bank Levy – The creditor must then get a court order allowing them to freeze and withdraw funds from your bank account.
- Your Bank Is Notified – Once the levy is approved, your bank is legally required to freeze the specified amount in your account.
🚨 Important: If you have NOT been sued or there is no court judgment, a debt collector CANNOT legally levy your account.
What If a Collector Threatens to Levy Your Account Without a Judgment?
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector CANNOT:
❌ Threaten to levy your bank account if they don’t have a judgment.
❌ Mislead you into believing they have court approval when they don’t.
❌ Access your bank account without legal authorization.
➡️ If a debt collector is making false threats about levying your bank account, they may be violating federal law, and you may have a case against them.
Are There Any Exemptions to a Bank Levy?
Even if a collection agency wins a judgment, certain types of income are protected from garnishment or levy, including:
✔️ Social Security Benefits
✔️ Disability Benefits (SSI, SSDI)
✔️ Veterans’ Benefits (VA Benefits)
✔️ Unemployment & Workers’ Compensation
✔️ Child Support & Alimony
✔️ Pension Payments & Retirement Income
🚨 If a debt collector levies protected funds, they may be violating federal law.
What Should You Do If a Debt Collector Levies Your Bank Account?
If your account has been frozen or levied, here’s what you should do:
✅ Verify the Judgment – Check if the collector legally obtained a court order.
✅ Check for Exempt Funds – If they took protected income, you may be able to reverse the levy.
✅ File an Objection – In most states, you can challenge a levy in court.
✅ Contact an Attorney – An experienced consumer protection lawyer can help you fight an illegal levy.
How The Wood Firm PLLC Can Help
If a debt collector is threatening to levy your account or has already done so, The Wood Firm PLLC is here to protect your rights.
📞 Call us at 844-638-1122
📧 Email us at help@protectionforconsumers.com
Don’t let debt collectors intimidate you—know your rights and take action today!
