How Long Can a Bank Account Be Affected by a Levy?
Paul RyanHow Long Can a Bank Account Be Affected by a Levy?
Abank account levyis a legal action taken by a creditor to seize funds from a debtor’s account to satisfy a debt. When a bank account levy is imposed, the bank may freeze the account and turn the funds over to the creditor. The length of time a bank account can be affected by a levy depends on a number of factors.
Type of Debt
The length of time a bank account can be affected by a levy is dependent on the type of debt owed by the debtor. For example, if the debt is atax lien, the Internal Revenue Service (IRS) can levy a bank account for up to ten years. This means that the bank account can be affected by a levy for the entire ten-year period.
State Laws
The length of time a bank account can be affected by a levy also varies by state. Each state has its own laws governing how long a bank account can be affected by a levy. Some states allow for a bank account to be levied for a longer period of time than others.
Bank Policies
Banks have their own policies governing how long a bank account can be affected by a levy. Some banks will release funds after a certain period of time, while others may hold the funds indefinitely. It is important to check with the bank to determine its policy regarding bank account levies.
Challenging the Levy
If a debtor wishes to challenge a bank account levy, they may do so through the legal system. This can prolong the amount of time a bank account is affected by a levy. However, if the debtor is successful in their challenge, the levy may be lifted and the funds in the account released.
Investment Strategies
If a bank account is affected by a levy, it can be a difficult financial situation for the debtor. One way to protect against such a situation is to diversify investments. By investing in a variety of assets, such as stocks, bonds, and real estate, the debtor can spread out their risk and protect against the loss of funds due to a bank account levy.
In conclusion, the length of time a bank account can be affected by a levy depends on a number of factors, including the type of debt, state laws, and bank policies. If a debtor wishes to challenge a levy, they can do so through the legal system. To protect against the loss of funds due to a bank account levy,diversifying investmentscan be a sound strategy.
Article review