Collect Your Court Judgment From Deposit Accounts

If you can find the debtor's bank accounts, you greatly increase the chance of collecting what you're owed.

If you've won a judgment against someone (called the "judgment debtor"), and they don't pay voluntarily, it will be up to you to go after the money. If you can find money located in the judgment debtor's deposit accounts savings, checking, money market, and mutual fund accounts in banks, savings and loans, or credit unions you are miles ahead in the collection game.

Information You Need

To seize the money in a bank account or the contents of a safe deposit box, you need the name of the bank, the branch, the exact name on the account, and the account number. Sometimes you can get the job done without the account number, but your chances of collecting are better if you have it.

You can easily find the debtor's bank and account number if you have a copy of a check written by the debtor, which may be the case if you had a business relationship. You may also have this information on a credit application or other form the debtor completed.

Are the Funds Exempt?

If the debtor is an individual, not a business, some of the money in a deposit account may be "exempt" protected from creditors. If you try to levy on an account containing exempt cash, it is up to the debtor to object in court and prove that the money came from an exempt source. But few debtors file such a claim. Even if the debtor does, it's possible that the debtor has some exempt money but mixes it with non-exempt money and cannot prove that the money came from the exempt source.

The following is a list of sources that the debtor may claim as exempt in most states. The debtor can exempt these monies only if they are held in personal not business accounts.

• Wages. The debtor may exempt up to 75% of his or her wages.
• Public benefits. The debtor may exempt these benefits: Social Security, veterans, welfare, unemployment, and workers' compensation benefits.
• Retirement plans. In most states, the debtor can exempt some or all of his or her public and private retirement benefits, including IRAs and Keoghs.
• Insurance proceeds. In most states, a debtor may exempt disability and health insurance benefits, matured (paid out) life insurance proceeds needed to support the debtor and the debtor's family, and the loan value of most life insurance policies.

Levying on Joint Accounts

If the account is in the debtor's name alone, the entire account will be subject to your levy. If the account belongs to the judgment debtor and his or her spouse, the entire account will be subject to your levy, but the spouse will have an opportunity to object to the levy.

If the account is in the name of the debtor and someone else who is not his or her spouse, you may not levy on the other person's share of the funds. Most deposit accounts are presumed to be held in joint tenancy the presumption is that each account holder owns an equal share of the account. For example, if the debtor holds the account with two other people, you can assume that the debtor's share is one-third, and that's the amount on which you may levy. In some cases, the bank will turn over an entire joint account, figuring it is up to the non-debtor to object.

For other ways to collect money from judgment debtors, see Collecting a Judgment.

Further Resource

For a complete guide to collecting your money after winning a judgment, get Everybody's Guide to Small Claims Court, by Ralph Warner (Nolo).