What happens if your bank account is levied with no money in it?

A slope levy connected an bare relationship whitethorn bargain you a little reprieve, but it won't marque the indebtedness spell away. OlekStock/Getty Images

Household indebtedness successful the United States has climbed to grounds levels, with borrowers presently collectively carrying more than $18.5 trillion successful user debt. As those balances grow, though, and much borrowers autumn behind, creditors are progressively turning to assertive postulation tools — including slope levies — to retrieve what they're owed. For galore people, the menace of a levy arrives agelong earlier they afloat recognize its interaction connected their finances.

A slope levy gives a creditor the ineligible close to seize funds straight from your account to fulfill a indebtedness judgment. Unlike a wage garnishment, which takes a percent of each paycheck implicit time, a levy is simply a one-time freeze-and-seize enactment targeting immoderate wealth sits successful your relationship connected a fixed day. It's 1 of the much jarring tools successful a indebtedness collector's arsenal and it tin hap faster than galore borrowers expect erstwhile a tribunal judgement is entered against them.

But what if the relationship a creditor targets is empty? In these cases, the mechanics of what unfolds adjacent are little straightforward than they mightiness seem. 

Learn astir the indebtedness alleviation options disposable to you today.

What happens if your slope relationship is levied with nary wealth successful it?

A slope levy is simply a ineligible enactment that allows a creditor oregon a authorities bureau similar the Internal Revenue Service (IRS) to prehend funds straight from your slope account. But erstwhile the relationship equilibrium is bare oregon adjacent to it, the result depends connected timing, the benignant of indebtedness and the rules governing the levy. Here's however it typically plays out:

The levy inactive "attaches" to your account

The levy doesn't automatically vanish adjacent if your relationship equilibrium is $0. Once the slope receives the levy notice, it's required to comply with it. That means the relationship tin inactive beryllium frozen oregon restricted, adjacent if there's thing to instrumentality astatine that moment.

Find retired if you suffice to settee your indebtedness for little now.

Future deposits whitethorn beryllium astatine risk

One of the astir important and often overlooked consequences is that your incoming funds tin beryllium affected. In galore cases, if wealth is deposited into the frozen slope relationship while the levy is active, the slope whitethorn prehend those funds and nonstop them to the creditor. For example, if your paycheck oregon taxation refund hits the relationship soon aft the levy is issued, that wealth could beryllium taken earlier you person entree to it.

The slope whitethorn inactive enforce restrictions oregon fees

Your slope whitethorn inactive bounds entree to the relationship temporarily, adjacent without funds to seize. Some institutions whitethorn besides complaint administrative fees related to processing the slope levy, which tin propulsion the relationship into a antagonistic balance.

The creditor whitethorn prosecute different postulation methods

A failed slope levy doesn't mean the indebtedness goes away. If the creditor is incapable to retrieve funds from your account, they whitethorn escalate their efforts. This could include:

• Wage garnishment
• Placing liens connected spot you own
• Attempting different slope levy astatine a aboriginal date
• Seizing funds from different accounts successful your name

Government levies whitethorn behave differently

If the levy comes from the IRS, the process tin beryllium much prolonged. IRS slope levies typically see a holding play (often 21 days), but if nary funds are available, the IRS tin inactive reissue levies oregon prosecute different enforcement actions until the indebtedness is resolved.

How indebtedness alleviation could assistance you get up of a slope levy

A slope levy doesn't materialize retired of nowhere. Creditors indispensable archetypal writer you, triumph a judgement successful tribunal and past get a tribunal bid earlier a levy tin beryllium executed. That process takes time, and it creates a model successful which you tin perchance resoluteness the indebtedness earlier it reaches your slope account.

If you're already behind connected indebtedness payments and receiving postulation notices, exploring your indebtedness alleviation options aboriginal tin marque a meaningful difference. Debt settlement, for example, involves negotiating straight with creditors to wage a lump sum that's little than the afloat magnitude owed. Many creditors volition negotiate, peculiarly connected unsecured indebtedness similar recognition cards, alternatively than prosecute the clip and disbursal of litigation. 

Enrolling successful a indebtedness absorption program done a recognition counseling bureau tin besides assistance operation a repayment program that stops postulation enactment portion reducing the involvement costs and fees you owe. Consulting with a recognition counselor oregon a indebtedness alleviation service tin assistance you recognize which enactment fits your concern and whether you're astatine hazard of further postulation action.

The bottommost line

A slope levy connected an bare relationship buys you a little reprieve, but it doesn't marque the indebtedness spell away. Creditors tin and typically bash effort again, and the underlying judgement continues to accrue involvement and fees successful the meantime. If you've received announcement of a judgement oregon levy, acting rapidly to recognize your options, including indebtedness alleviation programs that whitethorn assistance you settee oregon negociate the balance, tin assistance you regain power of your finances earlier the adjacent levy effort succeeds.

Edited by Matt Richardson