After the creditor recovers a money judgement (usually by default), the creditor will seek to execute this judgement. One common way that creditors seek to satisfy the judgement is by recovering property belonging to the debtor that is held by a third party-often a bank or employer. The creditor will serve this third party with a writ of execution and the third party will have to file a “return” identifying any property that belongs to you and is held by the third party. You will be given a copy of this return and will have an opportunity to claim exemptions or make other objections before the property is turned over to the creditor.
After your bank is served by the creditor, the creditor receives a judicial lien on the account. If your bank does not comply with the writ of execution, they will be personally liable for the debt. To prevent non-compliance or running the risk of being personally liable for the debt, the bank will freeze your accounts. It is common for debt collectors to “spray” writs on local banks in order to capture money which you may have in accounts at those banks. Collection lawyers also use databases to find bank accounts in which you may have deposit accounts or safe deposit boxes. Once the account is frozen you will effectively be locked out of the banking system and the funds in the accounts will be turned over to your creditors.
CONCLUSION
After receiving a judgement, creditors will want to identify the property you own that is available to satisfy the debt. To identify your assets creditors may send requests for disclosure, or use database searches. Once your financial institution has been served by the creditor the bank will freeze your accounts to prevent becoming personally liable for the debt. You can potentially prevent and limit levies to your account-contact the attorneys at Kain and Scott and see us at www.kainscott.com. You will be glad you did!
