A Levying Officer is Authorized to Seize Funds in a Bank Account Maintained by a Debtor to Satisfy a Judgment
If a creditor knows where the debtor has a checking or savings account at a bank, savings association, thrift and loan, or credit union, he/she can use a court procedure called a bank levy to collect enough money from the account to pay the judgment, if the debtor has an account in his or her name (as it appears on the judgment).
To seize funds in a bank account maintained by the debtor, a levying officer can serve the writ of execution on the bank branch where the debtor maintains an account. If your debtor has a joint account with another person and the creditor does not have a judgment against that other person (a non-debtor), the creditor will be required to post a bond for twice the amount of the balance owed on the judgment. This bond is intended to protect the interest of the non-debtor party. If the funds in the accounts are from wages, social security, unemployment, public assistance, disability and the like, the debtor may be entitled to an exemption. To make a levy of execution on a bank or other financial institution in California, the creditor must know the name of the financial institution, and also the street address of the particular office or branch where the debtor has the account.
The instructions to the levying officer must state the correct name and address of the institution and branch where the account is located and may, but do not need to include the number of the account upon which a levy is sought. If it is known, then include it.
After the levying officer receives your writ of execution, written instructions and the fees, he/she will serve the writ of execution on the office of the bank or other financial institution named in the instructions. A copy of the levying officer’s notice is also sent to the judgment debtor. There may be an account standing in the name of the debtor at that institution and branch. If so, the levying officer will take the money and pay it to the creditor. However, the judgment may not have identified the debtor by the debtor’s correct name. In that case, the bank or other institution may lawfully report that there is “no account” in the name of the debtor, even if the debtor actually maintains an account at that particular branch.
The account may be in the name of the debtor and some other person, such as a spouse or business partner. In that case, the levying officer will take the money and ordinarily pay it to the judgment creditor. However, the levying officer will also notify the other person in order to give that person an opportunity to claim that all or part of the money actually belongs to him or her, and not the judgment debtor. A claim of this kind is called a third party claim.
The account may stand solely in the name of the judgment debtor’s spouse. In that case, the bank or other institution will state that there is no account, unless the creditor furnishes the levying officer with a declaration, which states that the debtor and spouse are married and describes the facts and circumstances that lead to the belief that they are married. The levying officer will then give a copy of this form to the bank or other institution and the creditor will get the money in the account, unless the spouse or other account owner files a third-party claim and proves that the money in the account belongs solely to the spouse. If the account is in the name of the debtor and his or her spouse, the declaration is not required.
The account may stand in the name of a business that is owned by the debtor or the debtor’s spouse, or both. In that situation, the institution will again report no account unless the creditor furnishes the levying officer a certified copy of a currently valid fictitious business name statement that shows that the debtor and/or spouse are the sole owners of the business. If a spouse is an owner, the levying officer will need a declaration, stating that the debtor and spouse are married. The fictitious business name statement, if it exists, will be found in the records of the county clerk of the county where the business has its principal office. A certified copy of the statement can be purchased. The account may be in some other name - for instance, a corporation or some other person who is not a named debtor. In that situation, the creditor cannot levy execution on the account without a special court order.
