Will declaring bankruptcy stop a bank levy?

Answer by  John (9008)

Usually, it will at least temporarily stop the levy. However, the assets in the bank will almost certainly have to be paid to your creditors are part of your bankruptcy. Also, some forms of debt, including student loans, are exempt from bankruptcy.

Answer by  patti (29325)

Filing bankruptcy will stop the garnishments. Thinking about a bankruptcy, planning a bankruptcy and meeting with a lawyer does not stop a bank levy or wage attachment. Once the documents are filed, creditors must withdraw claims against a debtors assets. It may take some 30 days for the levies to be lifted.

Answer by  Dean (4035)

More or less, yes. Once bankruptcy is declared, creditors are notified and must proceed differently. How they proceed is determined by the type of bankruptcy sought as well as assets v. indebtedness. Once the debtor establishes a lack of funds and assets to pay bills, judgments cannot be leveled against him.

Answer by  patti (29325)

Filing bankruptcy and notifying creditors will stop future filings. A bank levy that's in place will remain in place until notification from the courts is sent to the creditors. The bankruptcy my be filed, and not simply being discussed or considered. The judgment for the levy is in place until the bankruptcy is actually filed.

Answer by  tamarawilhite (17883)

Bankruptcy will eliminate debts, such as auto loans, credit card debts, and perhaps a mortgage. If the levy is a series of bounced check fines, these are not bankrupt-able. Nor are student loans.

Answer by  John (9008)

A bankruptcy stops all legal actions, including levies. However, you will almost certainly have to give up these funds as part of your bankruptcy plan.

Answer by  mlucas (515)

Yes it will, temporarily. You need an exemption for the money or it will be used to payoff debtors. Usually bankruptcy courts do not require exemptions for amounts under $1000.