A Levy is a legal process by which a government authority or creditor seizes property or assets from an individual or business to satisfy a debt or tax obligation. It typically follows a court judgment or tax assessment and allows the creditor to collect owed amounts through the forced sale of property, garnishment of wages, or freezing of bank accounts. Levies are used to enforce payment when voluntary compliance has not been met.
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Key Facts
- Definition: Legal seizure of assets to satisfy debts or taxes.
- Authority: Initiated by government agencies (such as the IRS) or creditors after legal proceedings.
- Types: Can include wage garnishment, bank account seizure, or property lien.
- Process: Usually requires notice to the debtor before enforcement.
- Impact: Can significantly affect personal finances and credit standing.
1. What is a levy?
A legal action to seize assets to pay off a debt or tax owed.
2. Who can impose a levy?
Government agencies like the IRS or courts awarding judgment to creditors.
3. What types of property can be levied?
Wages, bank accounts, real estate, vehicles, and other personal property.
4. How does a levy differ from a lien?
A lien is a claim against property, while a levy involves actual seizure or sale of assets.
5. Can a levy be stopped or contested?
Yes, debtors can negotiate payment plans or dispute the debt before or after a levy.
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