Asking Your Bank About Levy Options
If you have a lot of debt that you owe to a creditor or that you owe to the IRS, then a bank levy may be in your future. When a bank levy occurs, the money in your account is going to be frozen, and it's going to be used to pay off the debts that you owe. Most commonly, these debts are owed to the IRS for past taxes or they are owed for other debts to creditors. When this happens to you, there may be little you can do to stop it, but you may be able to talk to you bank to help you understand what is happening.
When your account is levied, then all of the money in it is going to be used to help pay off your debts. If you have more money in the bank than you owe, then only the balance of your debt is going to be subtracted from it. If you owe more than you have, then your account is going to remain frozen and any deposits that go into it are going to be taken out and given to your creditor, so consider the advantages of a partial payment plan.
Talking to Your Bank
When a levy has been placed on your account, your bank is going to be the one responsible for releasing these funds to your creditor. If you want to understand what is going on, then you may want to go and speak with your bank about this issue. You can usually find an advisor at your bank who is going to talk you through this issue and tell you what needs to be done. If you have never had this happen to you before, then it could be something that is very confusing to you.
As your bank is notified of the levy that has been placed on your account, they will have to wait 21 days before they take money out of your account and pay your creditor. During this time, you have the option of waiving this period of time. That means if you want to the money to be removed from your account sooner, then you can authorize your bank to do this. If you just want to get things over and done with, then this can be a good idea for you to go ahead and do it.
Looking at Other Options
If you have asked your bank about your levy and want to avoid this from happening in the future, then you need to explore your other options for dealing with your debt. When it comes to IRS debt, there are a number of ways that you can try to handle it instead of going through a bank levy. Usually, the IRS will allow you to come up with a repayment plan that will work for you and allow you to pay back your debt on a monthly basis. This is a much better alternative to going through a bank levy.
When asking your bank about levy options, you may want to discuss what options you have when it comes to other creditors such as credit card companies. With these companies, you can usually negotiate to pay off your debt for a smaller amount than you actually owe. Find out what options you have for this kind of repayment today, and you may be able to work something out that will work with your monthly income and budget. Going through a bank levy is something that no one wants to do, so try to avoid it if possible.
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