By Mark D. Shapiro,
San Jose, CA, U.S.A.

http://www.judgmentbuy.com/

This is my opinion and a summary of what I have learned and observed. If you need legal advice, contact a lawyer as I am not a lawyer.

Although this article uses the State of California as an example of specific costs and procedures, the concepts will be similar in most States.

A levy (also known as a garnishment) of a debtor's bank account is one of the least complex ways to get paid, if you know where your debtor banks.

Even this simple method can seem complex, but after you do this once, it will be easier next time. Your court may have an advisor to offer some help.

If you do not know where a debtor banks, finding their bank account is sometimes difficult. Of course if the debtor has almost no money in their account, a levy is a waste of time and money.

Some ways to find the debtor's bank account are by having an old check from the debtor, having someone buy something from the debtor, a debtor examination, examining third-parties such as a friend or business partner, or hiring a private investigator.

Most States let you levy on any branch of the bank within the State. In California, the law is (unless the bank agrees otherwise) one must serve the exact same branch of the bank where the debtor first opened their account.

This law (CCP 684.110) was written in days of the typewriter, where one had to refer constantly to filed signature cards. Those days are long gone, and since money is fungible, it is silly to pretend the debtor's cash is only at one specific branch. As an example, you can get cash from your bank account at any branch.

Some banks such as Wells Fargo are modern and smart enough to let you serve any branch. Most other California banks make it harder to enforce judgments by making you serve the specific branch. Some banks, like Chase, are particularly uncooperative on bank levies. If the bank does not cooperate, you might be able to sue them, but that is beyond the scope of this article.

The first step of a bank levy is to get a writ. The writ is a paper form showing that the Court agrees you have permission to have a Sheriff take a debtor's assets. Writs cost $25, and generally last for only six months.

The writ has a math work sheet, that must be carefully inspected. It will be checked carefully by the Court and then will be endorsed with the Court's seal.

If you want the writ to include costs you incurred (such as debtor exams, liens, previous levy costs) and interest earned on a judgment, you need to fill out a Memorandum Of Costs (MC-12) form, and if there are costs, serve the MC-12 by mail to the debtor.

By requiring a proof of service for the memorandum of costs, it may tip the debtor off that you are going after their assets. Sometimes it's better not to claim costs until the first bank levy results are known.

Without a Writ, the Sheriff will not be able to levy. You need a Sheriff to levy the debtor's bank account. You need the Sheriff and/or a process server to serve the levy on the bank.

Specific Instructions:

1) Get a writ from the Court (currently $25) and fill it out. The best way to do this is to have a PDF program like Adobe Acrobat, and go to www.courtinfo.ca.gov/forms, and download the fillable EJ-130 writ form. Fill out the writ on your computer and print out two copies. Make sure the writ is for the same County the debtor's bank account is at. If filling out a PDF is not for you, you must type or very neatly write in ink on one original copy, and make a copy of it.

2) Bring the two copies to the court. Don't be surprised if the court says something is wrong, and you have to repeat step one a few times. When you get it right, you will have it ready to use as a template for future levies.

3) After the court accepts your writ and stamps it, they will make a copy for themselves. They will then stamp one of your copies as the official copy, and one as a receipt copy. Keep the receipt copy, but it does not do much as only the court-stamped copy of the writ counts.

4) Get an official copy, and make 4 copies of it, because the copies will likely be needed on future steps.

Prepare a letter of instruction for the Sheriff. Here is an example, this must be signed and dated by you:

To the Sheriff of COUNTY, STATE Your Name, address, phone, and email.

Please execute this bank garnishment against judgment debtor Barny Rubble, residing at 123 Pebble Lane, Bedrock, CA, 99999. Enclosed is a check for $30.00. If the levy is not fully successful, please hold the Writ Of Execution until it expires.

Please garnish (the amount necessary to satisfy this Judgment and all fees) all accounts in which the judgment debtor has any interest, including but not limited to any and all bank saving or checking accounts (including any remaining overdraft protection balances and lines of credit), CDs, safety deposit accounts and boxes, lock boxes, money market accounts, pledged securities, or notes - to satisfy Judgment Case # 1099-CV-123456

Thank You. Your name (Judgment creditor for judgment # 1099-CV-123456) Signed and Dated.

6) In some Counties, the Sheriff does bank levies for you. In this case, all you need is the original and the copies of the writ, a signed Sheriff letter, and a check to the sheriff for $30.

6a) If the Sheriff (in the County where the debtor's bank is) does not serve levies themselves, there are more forms and another check to write.

You pay the Sheriff ($30), and also pay a registered process server (about $85). You can find process servers easily, or Google NAPPS to find one.

You still need the signed Sheriff letter. You also have to provide two filled out (fillable PDF is best) copies of both EJ-150D and EJ-150G (notice of levy to both debtor and the bank) forms. Finally, you need two copies of EJ-152 (Memorandum Of Garnishee for the bank) form.

The old-school thoughts on when the best time to do a bank levy were based on dates of the month. Rent is due on the first, home loan payments are due on the 15th, so the old rule was to levy right before the end of the month or right before the middle of a month.

Less people have traditional jobs, and not every payment comes on the 1st and the 15th. Some levies are timed for when tax refunds are due. If you know your debtor's situation, you should attempt to time your bank levy.

If you don't know your debtor's schedule, or if the Sheriff serves it (the Sheriff levy processing time is not always quick), maybe just let providence determine the exact day the levy hits the debtor's bank account.

When your levy hits, you need to be very patient. The bank freezes funds for about 15 days, and then sends it to the Sheriff. The Sheriff usually keeps funds for at least 30 days.

Note the debtor can file a "Claim of Exemptions", and you must show up in Court on the specified date to prevent them from automatically canceling your levy.

If you get a notice of this in the mail, visit your court and ask them how to proceed. In general you must file an opposition to their claim. If the debtor does not have a valid reason, their attempt will not work.

Bank levies are a relatively "simple" way to Enforce a judgment. It's not as simple as it should be, and this leads some people to find a judgment enforcer to enforce their judgment.

Published - August 2010