Legal Bank Locates
Many people ask me if it’s legal to locate a debtor’s bank account and levy on the funds. Bank account levies can be profitable, but there are many legalities that you have to take into consideration to stay on the right side of the law.
So, is there really any such thing as legal bank locates? Yes, there is. If you have a court-ordered money judgment against someone, then you have the right to levy on all accounts located under that person’s name and social security number. If it is a business – then levy under the FEIN. State laws vary, so it’s always good to consult with a qualified attorney before taking action.
Why Would You Need Someone’s Banking Information?
There are many reasons why you would want to locate where someone banks, but the main reason is to levy on the account You probably came to this site because:
- You Won a Money Judgment,
- You Operate a Collection Agency,
- You have a Business Enforcing Judgments, or
- You’re an Attorney Looking for Assets
This post is based on an article written by Peter Gilboy, Ph.D. Peter is a Master Judgment Recovery Specialist, former U.S. Intelligence Officer, Professor of Ethics and Asian Traditions, and a published novelist. He’s also a good friend of mine, and he gave me permission to post his article on “Legal Bank Locates” below. You can read more about Peter here.
Perform a Preliminary Investigation
As I mentioned above, you need to have a court-ordered money judgment in your favor that has survived the appeal process usually 30 days. A money judgment is a very powerful piece of paper, and a bank levy is just one way to get your judgment satisfied.
Once you have this judgment in your hands, you can then pull credit reports, file for a “Writ of Execution,” and then proceed to seize assets through bank levies, wage garnishments, debtor’s exams and more. In this post, we’ll focus on legal bank locates as well as the actual bank levy .
7 Easy Steps to a Bank Levy
The process to perform a bank levy is actually quite simple. Remember that the Court Clerks work for you – the public! They are not allowed to give you any legal advice, but they can certainly point out the proper forms to use – as well as the costs involved.
Below are the seven steps involved in initiating a bank levy. Keep in mind that all states and counties have their own rules – but this should give you a pretty good idea of how it works.
- Apply for a ‘Writ of Execution’ at the Court House (Lists how much is owed by the debtor including interest and costs).
- Figure out (estimate) when the debtor will have the most money in his accounts (2nd or 16th of the month is good).
- Choose either a Sheriff (or Marshall) or a Private Process Server to perform the levy (Process Server is more expensive).
- Complete the additional paperwork for the Sheriff (Each state and county will differ)
- Pay the Sheriff’s fees (Around $50.00)
- Sit back and wait (The bank will freeze and hold the amount of money in the accounts – around 15 days)
- Sit back and wait some more! (Your check will arrive in 30 -45 days)
The above seven steps are just a GENERAL way in which a bank levy works. I have written a more -in-depth additional post about 10 Easy Steps to Perform a Bank levy on Your Debtor here. Check it out if you’re going this route to seize assets,
Ways to Perform Legal Bank Locates
You know that locating a Bank Account is a good way to collect the money that is owed you. With a legal money judgment, you can apply for a Writ of Execution at the court and have the Sheriff, Marshall, or a Process Server “hit” the bank.
There are websites that will charge you money for the information I am going to give you here. But I believe it should be available to everyone free. That includes the “how to do it” and the “what not to do.” The “what not to do” is important so that you won’t run afoul of the law.
What I’m going to say here is not legal advice. I am not an attorney, and only attorneys can give legal advice. But I can make some observations, and share some of my experiences. If you benefit from them, that’s all the better.
Okay, there are many ways to find a bank account Some are legal, and some are illegal. For example, it is illegal to call a bank and pretend to be the fiancé of the person who owes you money, wanting to make sure he is giving you correct information about his financial worth. Worse yet, you might pretend to be the debtor himself or herself. Don’t do that!
This is illegal because in 1999 Congress enacted the Gramm-Leach-Bliley Act (GLB), which specifically prohibits obtaining, or even attempting to obtain, another person’s financial information by making false, fictitious or fraudulent statements to a financial institution. If you want to read about all this from the GLB website itself go here. You will then be fully informed, though probably quite bored.
I have been told by some that the GLB was concerned with identity theft. It has even been suggested to me that those who want financial information, simply to collect money owed them, are not involved in identity theft, and therefore the GLB does not apply to them. Others would say that this is creative thinking. So be careful.
I’m not an attorney, but to my mind, it’s still too early to see how that might play out in the courts. Violation of the GLB is not something I would be involved in. So what are the legal ways to locate bank accounts? Some I’ll share here are obvious. Some others are creative. Some others are daring. Consult an Attorney, or research your local laws – please.
16 Ways to Locate Someone’s Bank Account
1. Use a Check the Debtor Wrote to You
Yes, this is obvious, and yes, the debtor may have closed his or her account. But it’s a good place to start. Your judgment may have resulted from a bad check. Or perhaps the debtor was a roommate, a friend (former friend), or even your employer.
If you know which financial institution the person banks with, levy on the accounts there. In almost all states, you can levy on any branch by serving a Writ of Execution, along with the other necessary paperwork, on any bank branch in the state.
Don’t: Call the bank and tell them the debtor gave you a check and you want to know if it’s good. (Unless you really do have a check.) Banks are on to this, and won’t believe you. The bank may also alert the debtor. And, it may well be against the GLB and other debt collection laws. Be careful. You don’t want the debtor to have a reason to sue you.
2. The Good Old Trash Run
This is also called the “Dumpster Dive.” Okay, so you don’t like dumpsters or trash -but you are determined. You’ll get this debtor to pay up one way or the other.
It’s a two-step process: Call the city and see when the debtor’s trash is picked up. Then go get it. I know some people who have done this regularly. They will go out to the debtor’s home or apartment, bringing along trash bags filled with newspaper. The idea is not just to take the trash, but to take it and then replace it new with trash.
Some ‘dumpster divers’ even take along different colored trash bags—white, black, green–so that the debtor won’t be alerted if he or she wanders out to get rid of one last beer can before bedtime.
The information found in trash cans is valuable, and you may find a lot of things that will help you enforce the judgment. That should also warn you about protecting your own trash and recyclables. They don’t always go directly to landfill or recycling machines. Can you say “home shredder?”
In some areas, the recyclables are sorted by convicts who are getting double credit for their time by being environmentally concerned citizens outside the recycling plant. They get to see all your tossed away papers, receipts, checks, bottles, and even those credit card offers you didn’t want. Hmmm. Be careful.
“Is it legal to dumpster dive?” you ask. Well, if I were your attorney I would advise you against doing it. Attorneys are conservative. They probably don’t know the answer, and know you don’t want to pay for them to research it. Besides, it is harder for them to get you to pay lots of money if they think you might be in jail.
But besides the usual attorney’s views, I’ve been told that there is case law that says that once the trash is on the curb it is fair game. But I’m sure there is other case law to the contrary. Check with your local waste management company. Go online and check your local law – or see your attorney with check-in-hand.
3. Divorce Records
These can be a goldmine of information. And in many cases, States will have Divorce Records listed as public information. A simple online search may do the trick here, with added costs to obtain the actual documents, so don’t dismiss this technique for gaining information.
The added benefits are that you may learn who did what to whom, who your debtor has been sleeping with (maybe more information than you want), how much alimony he or she gives, who got the stocks and accounts at Wells Fargo, who got the time-share in Aspen, and who got grandma’s silverware. Every divorce is a soap opera. Bring your handkerchief.
4. Check with People Who Know the Debtor
Even debtors have friends. Some even have lovers and past lovers. A past friend, past lover, or better yet, an ex-spouse is a terrific source of information about the debtor. Simply call them and say, “I wonder if you could help me.” (It’s hard to say ‘no’ when someone asks for help.)
Be upfront. Say who you are. And say you need some help because the debtor owes you money. Listen carefully as the individual tells you all his or her woes with respect to the debtor. Take notes. Ask questions. Banking information. Work location. Inheritance, etc.
Be careful: The FDCPA, or The Fair Debt Collections Practices Act (a bureaucratic mouthful), in some cases limits who you can tell about the debt. If this is your business, and if it’s a consumer debt, you can’t tell anyone except your own attorney, the debtor, and a few other people UNLESS you are trying to effect a post-judgment remedy. Suddenly, the wording looks pretty broad. But check with your attorney to make sure.
Or, look at “Title VIII, Section 805(b) of the FDCPA.” In fact, you should probably read this entire section before doing any sort of legal bank locates or bank levies. Communication with people, other than the debtor, can get you into a lot of trouble.
5. Bankruptcy Records
A lot of debtors have filed for bankruptcy, and they don’t know the wealth of information they have left behind. Bankruptcy is a public proceeding. They have to give the court their social security number, and list all assets to include bank accounts on the Bankruptcy Petition.
If you could only view their bankruptcy petition, you would have a ton of information. Good news! Bankruptcy petitions are online! Go to PACER. You have to set up an account, and, and the time of this writing, it’s free to get set up.
Spend a little time seeing how the site works, navigate to Bankruptcy Courts, and put in the information you have about your debtor. Even if your debtor filed Bankruptcy eight years ago, the records may still be online And even if the Bank information is old, a lot of debtors have trouble switching to a new bank because the new banks don’t want them. Try it. You’ll like it.
6. Purchase Something From the Debtor
If your debtor owns a business, you may want to purchase something from him or her, or have a friend purchase something. But remember, according to the GLB you can not misrepresent yourself.
Of course, pay for it with a check, and then see where it was cashed. And remember, when you levy on the bank account, be sure to include the name of the business. A business that is not a Corporation is one and the same as the individual who owns it. If you are not sure if the debtor is the owner, the county will have records under business license and Fictitious Business Names.
7. The Judgment Debtor Examination
Every state I’m familiar with has a means by which you can bring the debtor into court for questioning, and subpoena his or her records in the process. Of course, if you ask the debtor where his or her bank accounts are, they may lie or tell you the truth and then quickly withdraw the money or change banks.
But knowing ANY past bank is valuable, because you can subpoena bank records to find out where the money was coming from. Also, if the debtor lies and then you are able to produce an account through one of the other means here – you will likely have some leverage with the debtor and the court.
8. Subpoena the Top 5 Banks in Your Area
When enforcing a judgment, you have more power than you think. In California, for example, case law states that the judgment creditor may “leave no stone unturned in the search for assets.” That’s a pretty wide scope of possibilities.
A VERY effective way is through subpoenas. It’s potentially a goldmine. In most cases, it is not difficult to subpoena documents. Ask the court how you can do it, and ask for the forms as well. Remember that the Court Clerks cannot give you legal advice – but can point you in the right direction as far as forms and court procedures go.
An excellent time to subpoena documents is through the Judgment Debtor Examination. I’ve gone so far as to mail off subpoenas to 20 banks at once. It only costs me a postage stamp for each. And you never know what will show up.
And getting a subpoena is not as difficult as you think. Check with the court clerk or the legal advisor at court. Forms are there. The cost is a bargain.
On the subpoena, you might request “Any and all checking and savings statements of the debtor over the past 3 years.” Most of the banks will simply write back saying there are no accounts there. That’s fine. But then one day you may get a phone call from someone in a bank’s business department, who tells you that there is a 5 cent or 50 cent charge for each page. Bingo!
You may then ask whether that will include last month’s statement. Bingo again! The account or accounts are still open! Then you might want to ‘hit’ the bank right then. (Side Note: Check your state laws regarding “Notice to Consumer.” Your debtor may have to be notified that you are requesting the information. But that’s okay. He or she will feel the pressure. If the debtor objects to a subpoena at a particular bank, ‘hit’ that bank.)
9. Subpoena Vehicle Records
Does your debtor own, rent, or lease a vehicle? The license plate will often tell you where he or she got it. Then subpoena the application from the dealer. To get the best auto deal, the debtor was probably quite liberal in stating his assets and income.
You may also find out where the debtor works. Bank accounts will also be listed. Applications are terrific sources of information. Go for it, as you have nothing to lose here. Many times, you’ll gather enough information to try other enforcement measures.
10. Subpoena Rental or Mortgage Applications
Whether your debtor rents or owns a home, there is a paper trail you can exploit. If the debtor rents, send the manager or owner a subpoena for “full application and all other records relating to the rental of properties, as well as any copies of debtor’s checks maintained by the manager/owner.”
If the debtor owns a home, you can probably go online and get a copy of the “deed of trust.” Then you’ll know who the mortgage holder is, and you can immediately subpoena the mortgage application. Again, the debtor will have made a very positive assessment of his assets. And it’s yours for the asking.
(Side Note: See the above note on “Notice to Consumer, if your state requires it”).
11. Subpoena Information from Employer
Some employee information is confidential. However, which bank the debtor’s wages are sent to for direct deposit is fair game to request. Subpoena those with a Notice to Consumer. This link is a PDF showing the correct form to use in California.
12. 3rd Party Judgment Debtor Examination
I’m not familiar with the laws of every state, but, in many states, you can require that someone who owes the debtor money or who even “knows” about debtor’s assets can be required to appear in court and answer questions. Check with your court, and check the codes of your state online.
If it’s doable, do for it! Bring the person in (tax preparer, spouse, girlfriend) and ask the questions you want. In California, it is possible to bring in the landlord of the debtor, and even his employer. Talk about getting the debtor’s attention!
13. Shotgun Levy
Most people bank within a 2-mile radius of where they live or work. So go to Google Maps or MapQuest, put in the debtor’s address, and check to see what banks are in the immediate area. Choose the five main banks, get a writ of execution, and have the Sheriff or Marshall levy on all five of them.
You may get a ‘hit’ on more than one! A writ is usually less than $40, and a levy is probably around $50 dollars for each. That’s not much for what you may gain. It will also freeze the debtor’s account, and his checks may bounce. But you wouldn’t want that. Ha!
14. Property Records at the County
If your debtor owns real property, he or she will pay property taxes. In some states and in some counties the check you write is part of the public record at the Assessor’s Office. More and more these records are user-friendly. What used to be on microfiche and microfilm is, in many cases, on the county computer, and even online. Check the records at the county. See if it applies to you.
15. Find Out What Other Creditors and Debtors Know
The Court House computer is another treasure of facts. Much of it is even online now, and more to come in the future. If you put your debtor’s name in the court computer you’ll discover old judgments, cases that were dropped, people who are HIS debtors, old landlords, and likely a general cross-section of the debtor’s personal and work associates. You never know what you will find.
Take notes. Pull the files. Take more notes. Call all the people you can, and find out everything you can. Debtors are creatures of habit, like most people. They likely will have been banking at the same bank for years. Send your subpoena, or send out
16. Call the Banks and Ask About the Debtor
I know, I know. I said don’t call the bank and tell them you want to know whether the check you have is good. And I said that any misrepresentation is against GLB. But I’m not suggesting any misrepresentation.
What if you just called a bank and said, “Hi, my name is (your real name), and I have a Court Judgment against (debtor’s real name). The case number is (case number), and I need to know if he/she has any accounts with you.” A friend of mine actually tried this and found that if he called 8-12 branches from a particular bank, someone who answers would give up the information.
Someone will be impressed that it’s a court judgment, and say, “Oh, let me check. Yes, he has an account with us, but I can’t give you any other information. I’m sorry.” Or, they will say, “I’m sorry, no accounts here.” The point is that it may take you an hour to call 10 branches of a bank until someone cooperates. You are not misrepresenting yourself. You are exactly who you say you are.
Legal Bank Locates Conclusion
So there you have it. There are ways to locate a debtor’s bank accounts – legally. I’ll remind you again that I am not an attorney. Please seek out the advice of a qualified lawyer when attempting to collect a debt. If you take your time, perform your due-diligence, and stay within the law – you will collect that long-overdue debt.
Final Note: The debtor owes you money, and you want it. It may take some effort, but I encourage you to do it. 80% of judgments are not collected at all! The courts don’t help, and the Sheriff’s, for the most part, just deliver papers. So we have to do it ourselves – or get someone to do it for us. I suggest doing it ourselves.
Yes, there may be some initial frustration. But when you get to know the “system” pretty well, you’ll be a better and more informed citizen. You will probably also get some of the debtor’s money in your pocket, and there is more than monetary satisfaction in doing that.
Another possibility is to get an attorney or collection agency to get the money for you. It will cost 35-50% of what is recovered, but if you simply don’t have the time – or if your debtor is not in your area, that’s a responsible next move.
Related Bank Locate Questions
Can I hide money from debt collectors? Yes, you can – but don’t take this as legal advice! Under the mattress. Actually, there are many ways that you can do this. Don’t open a bank account – pay with cash and money orders. You could also give all of your spare cash to a friend or relative to hold on to for you.
Will someone collect my judgment for me? Yes, of course. Most people contract with a collection agency, but I would recommend contacting a Judgment Recovery Specialist. They’ll take around 40 – 50%, but it may be worth saving yourself the headache.