A levy is when the creditor receives a court order to seize the money in your bank account. For a certain amount of time, your bank account is frozen and you have the opportunity to get the levy lifted. However, if the levy isn’t lifted, the creditor can take the money from your bank account until the debt has been satisfied.
If you have money from multiple sources in your bank account, some protected and some not, the court will have to decide which funds come from which source. They sometimes decide that the first funds into the account are the first funds taken out of the account. So, if your Social Security is deposited before any other money, then your first purchases come from Social Security income. This means you may have already spent the income that’s exempt from levy and everything else is subject to the levy.
Exception: The IRS can levy Social Security benefits and the Treasury can levy for certain child support and alimony payments.
