Levying on a Social Security Number, Corporate ID Number, or FEIN Number

One of the questions that we frequently hear is, “can I do a levy, if I do not know the debtor’s account number?” This answer is, generally, yes, but this is also a two-fold issue.

One of the many misconceptions about enforcements of judgments is that the creditor will have to levy upon a specific account number. This is completely incorrect. The true scenario is that the creditor can levy on the depository accounts in the name of the debtor, the debtor’s spouse (with an “affidavit of identity of spouse”), in a fictitious business name of the debtor, and/or “whether held in the name of the debtor alone or together with third parties”. Of course, though, if a creditor were to submit a bank levy, for example, to a bank against “John Smith” (with no other information denoted), the bank will invariably respond by stating that it cannot sufficiently ascertain to whom the levy actually pertains and, as a result, state that insufficient information has been provided to comply with the levy. In fact, this will likely happen with any banking or financial institution if you cannot sufficiently identify (narrow down) the debtor. The reason for this is that banks or other institutions will unvaryingly do whatever they can, within their “reasonable” (unfortunately, a very loose term) power, to protect their own clientele from your adverse actions and, thereby, promote their own agenda which is to satisfy their clients.

In order to overcome this issue [i.e. the excuses by the bank or other financial institution as to why they are “unable” (more like ‘not willing’) to comply with your levy], you have to precisely pinpoint the debtor and, as a result, pin down the bank or other financial institution into doing what you want to have done (i.e. levy upon all accounts…).

The answer to this conundrum is to levy upon the name and Social Security Number of the Debtor. In cases of business-entity-debtor’s, this number may be the corporate ID number or the business’ FEIN. When you provide the name and sufficient identifying information (such as a SSN, FEIN, etc…) of the debtor, the bank must respond appropriately, which is to: levy upon any and all funds, accounts, deposits, and safe deposit boxes, in the name of the debtor, whether alone or together with third parties including fictitious business names… (notably, DBAs/FBNs are directly associated with an individual debtor’s SSNs).

In short, you do not need to know the account number of the debtor (which likely changes frequently). You do, however, need to know the debtor’s correct name (and possible aliases) and the debtor’s express identifying information such as an SSN and, in some cases, a DOB, in order to accomplish a successfully levy.

If you do not know this information, try to avail yourself of the procedures available to acquire this information such as Debtor’s exams, public records searches, subpoenas, etc… Don’t forget that you can obtain an image of a debtor’s previously deposited check (from your own bank) in the event that a debtor previously made a check payable to you. In that case, you may wish to subpoena records pertaining to that particular bank account of the debtor, which could include statements and images of deposits or cancelled checks, either of which may lead to, then, discovering the debtor’s current employer. You could also discover images of checks the debtor uses to pay rent, in which case you could, then, subpoena the apartment or property manager for such valuable information as applications to rent (where debtors generally boast about their accounts rather than hide them) or images of current checks or money orders used by the debtor to currently pay rent (and if the money orders are drawn from banks rather than a 7-11, for example, you might find where the debtor banks, even if you do not discover the particular account number – notably which is irrelevant if you can provide sufficient identifying information such as a SSN or FEIN).You might also discover direct deposit records and cancelled payroll records, which could, in turn, lead to a new employer or peripheral bank account.

Tracking debtors and keeping current with their current information, location, and financial circumstances can be difficult (and may sometimes feel like a ‘figure-8’), but keeping current with these facts can, oftentimes, shortcut the long term and, sometimes, daunting, process of the collection process.

It should be realized that levies will not work against an individual when an account is in the name of a corporation, LLC, LP, LLP, or other recognized entity, or vice-versa. For this, a judgment would need to be against the entity and the individual, jointly or severally, as applicable.

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Posted by: cbusey on April 30, 2016
Posted in: News