A levy is one method of collection action that the Division of Collections may use to collect a liability that has not been paid. The Division of Collections has administrative authority to issue levies. We do not have to go to court, but we must attempt to notify you by certified mail. The Division of Collections issues three different types of levies:
Bank – a bank levy is issued to a financial institution such as a credit union or bank. A bank levy is a “one time hit”. It only puts a hold on money in your account at the time the levy is processed by the bank. Certain funds are exempt from levy, such as retirement benefits, pensions and public assistance. The Division may issue multiple bank levies in an attempt to pay the debt(s) in full.
Wage – a wage levy is issued to the debtor’s employer. It remains in effect until the debt is paid in full, the person no longer works there or the statute of limitations expires.
Third Party – a third party levy is issued to someone who might be paying the debtor for something. Examples include, but are not limited to, a demand note, cash value of a life insurance policy, or contract payments.
Some types of property are exempt from levy and are listed below:
- Property that is exempt from judgment is also exempt from levy
- Court mandated child support
- $5,000 of residential property
- Pensions and retirement benefits
- Public assistance
- Worker's Compensation Disability Insurance