Income Exempt From a Levy
We live in a country that offers us a lot of financial opportunity, and millions of people are doing their best to make enough income and create a comfortable life. However, some people are going to run into problems, and many of us will end up entering into some kind of debt at one time or another. Debt is a part of our financial system, and when properly managed by using longer payback time frames, does not need to become a problem that will cause undue stress or complication. However, some people that find themselves facing debt will let their debt go unchecked and may end up being subject to a bank levy.
Bank Levies Explained
A bank levy is essentially a hold that will be placed on your bank account, and the account will remain frozen during the duration of the levy. During this time, the IRS or the creditor that places the levy will be able to take funds from your account up to the amount that you owe. So in short, a levy is the last resort of the creditor to get the money that they are owed by bypassing the debtor and going straight to the bank. However, there are certain types of income and funds that the creditor will not be able to withdraw.
Income that is exempt from a bank levy cannot be withdrawn without the consent of the account owner. There are several types of funds that fall into this category. The following is a basic explanation of some of the kinds of money that will be protected from bank levies, and this information may be of use to you if you ever find yourself facing this kind of problem.
Each state is going to have their own laws when it comes to the income that is going to be exempt from a bank levy. However, in most cases the exempt income is going to be very similar. Money for child support, veterans benefits, social security, welfare and other monies are all usually going to be exempt from a levy, and the individual will still be able to access these monies when a levy is placed on their account. Other exceptions may include certain kinds of pensions, trusts and interests that are raised from specific types of savings. If you find that a levy has been placed on your account, you will want to quickly learn what kinds of exempt monies have been stipulated in your state laws.
While some money will indeed be exempt from your bank levy, it is still much wiser to do your best to simply avoid the levy in the first place. Customers that run into these kinds of problems are those that have typically ignored their tax debt or credit debt, and they most likely could have avoided the levy by speaking with their creditor and arranging an acceptable method of repayment. If you feel as though a levy may be looming, speak with the organization that you are indebted to, and consider any possible repayment options.
A bank levy can be a very stressful and difficult problem, but if you find that a levy has been placed on your account, hopefully the information in this article can help you realize what to do. Remember than income exempt from a levy will still be at your disposal, and your creditor will not have access to these funds. Do your research, find state laws, and then do what you can to make the best of your bank levy.
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State Guides to Credit Card Laws
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