Bank Refused to Levy Debtors Account

[chico landlord]

What is the name of your state (only U.S. law)? ca. I have a judgment against a tenant for damages to an apt. I knew the tenant's banking info from a check they wrote to me. After thier appeal time has went by I obtained a writ of execution , took this to sheriff to levy thier account. Writ was returned unsatisfied . Only comment bank made was (Funds under personal exemption for exempt funds) . From what I understood the way a levy works is the bank would freeze the account then the account holder would file with the court a claim of exemption . Then i would file a opposition to claim of exemption and we would have a hearing to determine if funds are exempt. Did the bank screw up? Can someone just say the are exempt? I asked legal aid and it is beyond thier scope. Any help would be appreciated.

 

[racer72]

It is possible to notify a bank that the funds in a bank account are exempt from levy. Many banks will automatically do this if they know the funding for the account comes from exempt sources. The bank did not screw up.

 

[chico landlord]

I couldnt imagine the bank would speak with me about this . I imagine a lot of people have exempt funds and it appears the bank did exactly what you described. It seems unreasonable to me that the bank has the power to make this determination themselves. I think some of thier funds are exempt and some are not ,this is why there is a hearing process in place. Sorry for the rant just seems unfair to me.

 

[cosine]

The bank has the records for the account. Not all transactions are necessarily obvious about whether or not they are an exempt source. But many are clear about their source. When it is clear, and it is exempt, then it is up to you to prove otherwise before depriving the holder of these monies. The idea here is that someone with clearly (to the bank) exempt funds should not be deprived of them for a while just because you want to have some other process figure this out. I'm sure there is still a process available to you if you believe the funds are not exempt. Maybe you can get a statement from the bank as to what the source of funds is, and how much there is that is not from exempt sources.

 

[Willlyjo]

I couldnt imagine the bank would speak with me about this . I imagine a lot of people have exempt funds and it appears the bank did exactly what you described. It seems unreasonable to me that the bank has the power to make this determination themselves. I think some of thier funds are exempt and some are not ,this is why there is a hearing process in place. Sorry for the rant just seems unfair to me.

You can still set up a hearing to question the judgement debtor before the court.

 

[chico landlord]

I spoke with the levying officer and the bank can refuse the levy if they feel the funds in the account are exempt. Willyjo , I cannot file to have a hearing on this because they need to file a claim of exemption then i could file a opposition to claim of exemption then we would have a hearing. This is the way it should work. My only option is to file a order of examination and subpeona for thier records then i could get thier banking statements. Someone told me Texas is a debtors paradise , I would argue that now. Thanks for all your replies.

 

[racer72]

This is the way it should work.

No, things are going the way it should be. As the plaintiff, it is up to you prove your case. If in collecting the debt, you were to cause the defendant unnecessary damages, such as preventing them access to their money, you could be held liable.

 

[Willlyjo]

I spoke with the levying officer and the bank can refuse the levy if they feel the funds in the account are exempt. Willyjo , I cannot file to have a hearing on this because they need to file a claim of exemption then i could file a opposition to claim of exemption then we would have a hearing. This is the way it should work. My only option is to file a order of examination and subpeona for thier records then i could get thier banking statements. Someone told me Texas is a debtors paradise , I would argue that now. Thanks for all your replies.[/QUOTE

An order of examination is what I speak of when I suggested file to get the matter heard. When you order an examination, you are seeking appropriate information in which to help you get your judgement.

Also, your questions as to why the bank would not allow you to attach the bank account would be answered since the examination takes place with the immediate accessibility of a judge.

 

[blueturnaround]

I'm thinking that most likely the debtor didn't have enough funds in the account, therefore, nothing could be levied. Most states have an exemption amount that cannot be taken.

Try levying it in a few years. You can also subpoena the bank later when you try to collect again, there will be deposit checks, etc...

Or just subpoena the bank a few years from now to see if there is money in it...then levy when there are funds in there.