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How do I remove a lien from my bank account after chapter 7?

Murrieta, CA |

A credit card company sued me...Unfortunately, I ignored the summons from court because I was about to file chapter 7. Before everything was finalized, there was a judgement placed and a my bank accounts were levied...I sent my bank a paper showing that I had began the bankruptcy process and they put a hold on the funds so me and the creditor could not have access to it. This all happened about a year ago and I get different answers from my bank, the sherriff, bankruptcy court, the creditor . The money is still sitting there for probably 30 years...Please let me know what I can do!

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Attorney answers 5


I represented a debtor that just had their bank account levied from a judgment creditor. We filed chapter 7 so that further levies would be stopped. As to the funds that were frozen, we wrote a letter to the bank informing them that the funds were estate property, exempt, and that transfer of the assets to the creditor would be a violation of the automatic stay. If the funds had already been transferred, the transfer would have been a preferential transfer since it would have occurred within 90 days of filing, and this is something we would have sought reversal of.

A local attorney would probably be able to give you some insight to your specific facts.


You haven't really given enough information here to allow for a useful answer. But as a starting point, here are two questions you can try to answer.

First, was some or all of the cash in that bank account EXEMPT, so that those funds went back to you after the bankruptcy case was concluded? In some cases, the funds are NOT EXEMPT, meaning that the Trustee can take the money to distribute to creditors. Did that happen?

The second question is, did your case result in a discharge of your unsecured debts? Unfortunately, some bankruptcy cases are dismissed because of omissions, mistakes, objections to the discharge, etc. What actually happened at the conclusion of your case?

Many attorneys on AVVO want to help, but if this is a complicated situation, we may not be able to give you the help you need. The best way for you to resolve this problem is to meet with a bankruptcy attorney and bring him/her all of the documents and notes from your conversations with the bank, sheriff's department, trustee, etc.

Good luck.

This answer is for general information purposes only and is not legal advice. No attorney-client relationship is intended or formed by the posting of this answer.


I belive Ms. Espada gives a very complete answer here -- starting with the premise that we simply do not have enough information here. Also know that state law can affect this issue significantly so in addition to the comments above I want to echo that you really will need to speak to local competent counsel about this.

Good luck!


Under California law, the levy created a lien on any money in the accounts or held by the sheriff. A bankruptcy discharge does not automatically remove the judgment lien, so you would need to file a motion to avoid the lien in a timely manner. Otherwise, the sheriff and would be authorized to release the money to the creditor after the discharge, assuming the trustee was not interested in the money.

The proper procedure is to list the levied money as a separate asset on Schedule B, claim it as exempt if you can and then file a motion to release the lien and have the money returned to you under section 522(f) of the Bankruptcy Code. It sounds like you didn't do that.

You need to get an accounting from the sheriff and the bank to find out what happened to the money. If the still have the money, you may still be able to take the steps outlined above. If the sheriff sent the money to the creditor, you are probably out of luck.

Feel free to contact me office if you need further assistance.

First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.


If you listed the credit card company in your bankruptcy paperwork they will be notified of the discharge by the court when it is issued. If the levy was placed on the account pre-petition and the money was taken the money is gone. If the sherriff still has the money then you can reclaim it by showing the Sherriff a copy of the discharge order. If the bank is will not release the funds to you show them a copy of the discharge order as well. If they still will not release the funds you may have to reopen the bankruptcy case and get sanctions against them and an order from the court forceing them to release the funds.

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