What is Levi's?

A levy is the legal seizure of property to pay off a debt. A levy is usually  an attachment or punishment for a tax debt or a court judgment requested by the creditor of the debt  .

In some cases the term levy may be used more generally than ""attachment"" or ""garnishment"".

What is the purpose of a levy?

The purpose of a levy is to allow the IRS or a debt collector to seize wages from a debtor who has not paid his or her outstanding balance. This is usually a last resort for creditors, as they must alert their debtors with at least 30 days' notice that they plan to collect their debt by enforcing a levy.

How does a levy work?

When a levy is in effect, the debtor's financial account will be frozen by the creditor. This means that the debtor cannot make any withdrawals from his account for a certain period of time. During that time frame, the creditor will collect capital from the financial account to cover the outstanding debt.

Until the entire debt is repaid, any money deposited by the debtor into the account will be taken by the creditor to pay off the debt. Once the debt is paid in full, the creditor will unfreeze the financial account.

In some cases, the court may decide to allow the creditor to levy physical property. In this case, the creditor can take the personal property and determine its value to discharge the debt. However, this is quite rare.

What is an IRS levy?

An IRS  levy  is a means by the IRS to collect money from individuals who have not paid their taxes.

The IRS can seize a taxpayer's property through any of the following means:

• Checking/Savings Accounts
• Investment Accounts
• Salary
• Social Security Savings
• Pension
• insurance policies
• Physical Property
• Accounts Receivable

The IRS will not impose a tax debt without first notifying the debtor. Generally, the IRS will follow a five-step notification process before imposing a tax debt:

• The amount of tax is assessed by the taxpayer or the IRS.
• A tax bill is sent to the taxpayer.
• If a tax bill is not paid by the tax deadline, the IRS will notify the taxpayer to remind him or her of the tax due and warn him or her of the consequences if the taxpayer fails to pay.
• If the taxpayer still has not paid his or her taxes, the IRS will send warning letters titled “Final Notice of Intent to Levy” and “Notice of Your Right to a Hearing.”
• After receiving these letters, taxpayers will have 30 days to resolve the taxes or fees owed.

What is a bank levy?

Bank levies and IRS levies work similarly. However, in a bank levy, it is not a government agency that attempts to collect the debt. In the case of a bank levy, any creditor to whom the debt is owed can request a levy, provided they alert the debtor ahead of time.

What is the difference between tax and levy?

While they are related, there is a key difference between a tax and a levy. A tax is a mandatory contribution that a government imposes on an organization or individual as a means of contributing to state or federal revenue. Meanwhile, a levy is a forceful seizure of assets to cover a tax charge or debt when the debtor fails to pay his dues. Both terms describe different stages of the process: After taxes or borrowing create a debt, a levy attempts to collect on that debt.

Another important difference is that taxes can be implemented by a non-governmental organization, while duties are only established by the government.

What is the difference between a levy and a garnishment?

Levy and garnishment are ways in which creditors can take money from a debtor to pay off their outstanding debt. However, the methods of collection vary.

In a levy, money is taken directly from the debtor's financial accounts. Any deposits made by the debtor into that account will also be taken in this process. Since this method has access to a large amount of capital, this method of debt recovery can be completed somewhat quickly.

 With  garnishment , a creditor requests that the debtor's employer take a portion of the debtor's wages and send it to the creditor. These reserved portions of wages are then used to pay the debt. During a garnishment, the creditor cannot take more than 25 percent of the paycheck per pay period. Thus, the time it takes for a garnishment to be completed will vary depending on the size of the debt and the debtor's wages.