Bank Levy Holding Periods
Most people living in America are aware of the fact that debt is a big problem. When you find yourself in debt, you may find that you have a difficult time getting out from under it. However, while debt is a very difficult issue for people who experience it, it is also a problem for the financial institutions that lend money. Banks, Creditors and the IRS all have to deal with people who may owe money and have to manage unpaid taxes, and they have several tools at their disposal to help them collect. In some extreme cases, these organizations may use a bank levy in order to collect funds.
What a Levy Does
A bank levy is a hold on your account that will completely freeze the account and allow the creditor or IRS to seize the money that they are owed. A levy is a very serious action, and it typically the last resort when a customer or taxpayer does not meet their debt obligations. There are a few things that consumers should understand about bank levies, and holding periods are one of those things.
Holding Periods Explained
When a creditor or the IRS decides to open a bank levy on the account of a debtor, they will have to go through the appropriate legal channels in order to open that levy. When a levy is approved, a holding period will then occur. This holding period represents a period of time that the bank must wait before sending the funds to the creditor or IRS. Holding period times are typically around 21 days, and they represent a period of time that the debtor can use to take care of the levy.
During the holding period of a bank levy, a debtor can do several things to improve their situation. Many people will choose to challenge their levy with the court that issues it, and in some cases these people will be able to have the levy removed. This kind of challenge is typically going to be more effective if the levy was placed by a creditor rather than the IRS.
During the holding period of your bank levy, you may also be able to work out some terms with the creditor or the IRS. In many cases, the individual will be able to reduce the amount of money that will be seized, or the may even be able to work out a repayment plan with the creditor or IRS. If you find that a levy has been placed on your account, you will want to contact the organization that ordered the levy and determine what kinds of actions you may have.
If a holding period expires and the debtor has done nothing to appeal the levy, then the bank will be able to release the funds to the creditor. Because waiting periods are fairly short, you will want to do all that you can in that time to resolve the problem and remove the levy. In some cases, people will even hire a financial lawyer to help them with the proceedings and help them fight their levy.
Bank levy holding periods are an important aspect of a bank levy to understand, and they represent a period of time that can be very beneficial to the debtor. If you have had a levy placed on your account, learn all that you can about waiting periods and then do your best to handle the levy. With the proper research and actions, you can avoid some serious financial problems and preserve the security of the money that you have in your account.
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