A levy occurs when a creditor freezes an account the debtor owes. The next step is to deduct the money the debtor owes. If the money doesn’t cover the debt, a creditor will continue to freeze the account. The account is unfrozen once the debt is paid in full.

What is a Garnishment?

A garnishment is an order enforced by an employer to take a portion of wages from an employee’s paycheck. The typical amount taken from each paycheck is 25 percent. The law requires the employer to send the money to the creditor that obtained the garnishment.

Who Can Obtain a Levy?

A levy is generally attached to a bank account by a government agency. This includes agencies like the IRS and Department of Education. A private creditor can obtain a levy, but most courts require a private creditor to obtain a judgment first.

Who Can Obtain a Wage Garnishment?

Creditors typically use garnishments to obtain debts. The first choice is usually a wage garnishment. The second option is a bank garnishment, which is a type of levy. A federal agency can use garnishments for debts such as student loan debts and back taxes.

Is a Creditor Required to Get a Judgment Against the Debtor First?

Yes. A private creditor must sue a debtor in court for the debt. Only if the creditor wins can it obtain a wage garnishment.

Is an Attachment the Same as a Levy or Garnishment?

No. An attachment is a court order to seize property from the debtor to satisfy a debt owed to a creditor. The attachment can include a court order to freeze money in a bank account.

Do I Need to Hire a Lawyer for a Levy or Garnishment?

It’s in your best interest to hire a bankruptcy lawyer to advise you of your rights.