Can a Creditor Levy Your Bank Account More Than Once?

Can Your Bank Account Can Be Levied Multiple Times?

Unfortunately, yes — your bank account can be levied more than once. A bank levy doesn’t always end after the first withdrawal. If the creditor wasn’t able to recover the full amount of money you owe, they can request additional levies until the debt is completely paid off. The good news is that the creditor can’t do this without court approval.

Before we get into the specifics, let’s back up and explain bank levies in more detail.

What Is a Bank Levy?

If you’ve fallen behind on debt payments — like a car loan, credit card, or personal loan — you should be prepared for what creditors can do to collect the money. One debt collection tool they have is a bank levy. This allows creditors to take money directly from your bank account, like a checking account or savings account, to pay off what you owe. They can keep taking money until the debt is fully paid.

It’s normal to feel nervous about this process, but the good news is that a bank levy doesn’t happen out of nowhere. Creditors need to follow specific legal steps, and knowing the process can help you feel more in control.

Here’s how it works: Before a creditor can take money from your account, they must sue you in court and get a judgment saying you owe the debt. Once they have that judgment, they’re called a judgment creditor. With this court order in hand, they can move forward with the bank levy. Creditors might include credit card companies, auto lenders, mortgage companies, or even the federal government.

A bank levy can feel overwhelming, but you have rights and options. Understanding the process is the first step to protecting yourself. 

How Does a Bank Account Levy Work?

Once a creditor gets a court judgment against you, they can take steps to levy your bank account. Here’s what typically happens.

After winning the lawsuit and getting a judgment that confirms you owe the debt, the creditor becomes a judgment creditor and can ask the court for permission to levy your account. This permission comes in the form of a legal document called a writ of execution. Depending on how quickly the court processes this, the creditor may be able to levy your account within a week or two of winning the lawsuit.

Once the writ is issued, the creditor sends it to your bank. The bank is then legally required to freeze the funds in your account up to the amount of the debt. While your account is frozen, you won’t be able to access that money. The bank will then send the frozen funds to the judgment creditor to pay off the debt.

Keep in mind that the terminology for this process can vary by state. For example, in Florida, a levy is called a bank account garnishment. Other states reserve the term "garnishment" for when creditors take money directly from your paycheck, rather than your bank account.

Government Creditors Don’t Need a Court Judgment

There’s one exception to the court judgment requirement: government creditors like the Internal Revenue Service (IRS) or Department of Education. These agencies can levy your account without going to court because the debt is owed directly to the government. 

For example, if you owe unpaid taxes or have defaulted on federal student loans, these creditors can bypass some of the usual legal steps (like the lawsuit and writ of execution) and freeze your account more quickly.

Will Your Bank Account Be Levied More Than Once?

Though your bank account can be levied more than once, creditors must first court approval. But getting that approval is usually straightforward for them. All they have to do is show the court that there’s still an unpaid balance.

If the remaining amount of money you owe is small, the creditor might decide it’s not worth the effort to pursue another levy. But if there’s a large balance still, they’ll likely keep going until they collect the full amount.

If your account has already been levied, it’s a good idea to check whether the debt was fully paid off or if there’s still a balance remaining. This can help you understand if your account might be at risk for another levy. 

Will You Be Notified Before Your Bank Account Is Levied?

One of the toughest parts about a bank levy is that you usually won’t get any warning before it happens. Neither the creditor nor the bank is required to notify you before freezing your account. This is because if people knew their money was about to be seized, they might withdraw it all before the creditor could act.

That said, a creditor can’t levy your account out of nowhere. Like we explain above, to issue a levy, they must first sue you and win a court judgment. This means you’ll know that a levy is possible. For example, you might’ve already received phone calls from debt collectors, letters from a collection agency, or other signs that legal action was being taken to collect the money you owe.

This is why it’s so important not to ignore lawsuits or legal notices. If you’re served with legal documents or a notice of legal action, don’t brush it off. These documents might be the only warning you get before a levy happens. The notice could come weeks or even months before your account is frozen, so it’s best to act as soon as possible.

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How To Fight a Bank Levy

A bank levy can be stressful, but there are steps you can take to fight back or minimize its impact. Some options involve stopping the levy altogether, while others may help you regain financial control. 

Here are your options:

• Pay off the debt or negotiate with the creditor

• Object to the levy, if you have a valid defense

• File bankruptcy to stop the levy and discharge the debt

Pay Off the Debt or Negotiate With the Creditor

The simplest way to stop a bank levy is to pay off the debt in full. But if that’s not realistic, many creditors are willing to negotiate. You may be able to work out a payment plan or settle the debt for less than what you owe. Reaching out to the creditor early — even before a levy happens — can help you avoid more aggressive collection efforts like wage garnishment and bank levies.

If the levy has already been issued, negotiating a payment plan may still stop it. Creditors are often open to pausing or lifting a levy once you’ve shown that you’re willing to work toward repayment.

If the levy is from the IRS and causing serious financial hardship, you can request a levy release. To do this, you’ll need to provide documents showing how the levy affects your ability to cover basic living expenses. If the IRS denies your request, you can appeal their decision.

Object to the Levy if You Have a Valid Defense

Sometimes, you can challenge a bank levy and prevent the creditor from accessing your account. 

Common defenses include:

• Creditor error: If the creditor miscalculated the amount of money you owe or is trying to collect on a debt you’ve already paid, you can object to the levy.

• Lack of notice about the court case: Creditors must follow proper legal procedures, like suing you in court and notifying you of the legal action. If they skipped any steps, you may be able to stop the levy.

• Identity theft: If the debt isn’t yours because someone stole your identity, you can fight the levy by proving you’re a victim of identity theft.

• Expired debt: Debts have a statute of limitations, which limits how long creditors can collect on them. If the debt is too old, the creditor may no longer have the legal right to levy your account.

For any of these defenses, acting quickly is important. You’ll need to gather documents to support your claim and file an objection with the court before the levy proceeds. If you need legal advice, your local legal aid agency may be able to provide free or low-cost services.

File Bankruptcy To Temporarily Stop the Levy

Filing for bankruptcy puts an automatic stay in place, which temporarily stops all collection efforts, including a bank levy. This gives you some breathing room to address your debt and work out a long-term solution.

If you can’t afford to hire a bankruptcy attorney, Upsolve’s free online tool can help you file for Chapter 7 bankruptcy on your own. Bankruptcy isn’t the right choice for everyone, but it’s worth considering if your financial situation feels overwhelming.

How To Protect Exempt Funds From a Bank Levy

Some of the money in your bank account may be exempt from a levy, meaning creditors can’t legally take it. When a creditor issues a levy, the bank is required to review your account to identify any protected funds.

Unfortunately, this process isn’t foolproof — especially if your account includes deposits from multiple sources. Mistakes can happen, and banks may incorrectly allow exempt funds to be seized. If that happens, you’ll need to file a claim of exemption to protect your money.

Under federal law, certain types of incomes/funds are automatically exempt from bank levies, including:

• Social Security benefits

• Supplemental Security Income (SSI)

• Federal pensions or retirement benefits

• Disbursements from student loans

In some cases, child support payments you receive may also be exempt. However, if you owe back child support, creditors may be able to access these funds more easily to cover what you owe.

If you believe exempt funds were taken from your account, acting quickly is key. Filing a claim of exemption can help you get back the money that’s protected under federal or state laws.

How To File a Claim of Exemption

To file a claim of exemption, you’ll submit a form to the court or your bank, depending on your state’s rules. This form lets you explain which funds are protected and why they shouldn’t have been taken. You’ll likely need to provide proof, such as bank statements, Social Security award letters, or other documentation showing the funds are exempt. Deadlines to file can be short, so it’s important to act quickly.

To find the right form for your situation, try searching online for “claim of exemption form” along with your state’s name. Many state or court websites have these forms available to download, along with instructions on how to fill them out. Once you file your claim, the court will review it and decide if the exempt funds should be returned to you.

Let's Summarize…

If you default on a debt, a creditor can sue you, get a judgment, and levy your bank account to collect the money owed. Levies can happen more than once and may continue until the outstanding debt is fully paid. Banks and creditors aren’t required to notify you before freezing your account, which can make levies feel sudden.

That said, you may have defenses if you believe the levy was issued in error or if exempt funds were taken. Certain types of funds, like Social Security benefits, are protected and can’t legally be levied.

If you’ve received legal notices or court documents, take time to review them carefully. They may provide insight into the creditor’s actions and help you prepare. Understanding your state’s levy and garnishment laws can also help you better navigate the situation.