I'm a Judgment referral expert, not an attorney. This article is only my opinion, please consult with an attorney if you require legal advice. 31 C.F.R. Section 212.5 is a new Federal law that lets banks have 2 full days to comply with a sheriff garnishment, instead of the prior one day response they had been mandated to do.
During those 2 days, the debtor has complete access to their account and may remove their funds, if the bank tells them about the upcoming levy before it becomes active.
Do any banks inform their favorite depositors about upcoming actions? The majority of judgment recovery specialists will say yes, they have seen it happen. The enforcers claim banks regularly and openly delay freezing an account until they tell their customers about the upcoming levy, so the debtor have a chance to take out their money before the bank freezes their bank account.
One side says the new law is very well represented by judges at courts that make logical decisions after review of the facts of the case.
This 31 C.F.R. Section 212.5 law was really needed. There's many inexperienced judgment recovery specialists that say: "I'll take as much as possible, mess up my judgment debtor as much as I can, and it'll be their problem". Although the exempted funds identified in this law are, in certain situations, exempt without having to make any claim; which means that the judgment debtor shouldn't have to take any actions to stop the levy, it doesn't always turn out that way.
The new 31 C.F.R. Section 212.5 law was a really obvious fix which was required to make sure the various kinds of exempt exempt funds weren't frozen (or taken), and that a bank wouldn't have a liability for a short delay to figure out what is exempt.
Lots of bank levies go south because of legitimate exemptions. And, this law does not do anything to preserve the rights of people who have a legitimate claim on funds in a bank without any exemptions. The law helps banks protect their best depositors.
If the debtor's funds aren't exempted, and they vanish before the 2 days pass, why shouldn't there be some kind of recourse. Why should the debtor's funds not be frozen during the time period? That would insure that both sides of getting an equitable result. The 31 C.F.R. Section 212.5 law protects one side without considering the other side's rights.
One more way to view this law is it was written too strongly. The law has balance to everyone, and is not perfect for anyone. When a bank warns their depositor, and that depositor takes out their money and later that bank tells the sheriff there wasn't any funds available when the levy hit, that's fraud.
Now a bank get 2 days to stop your levy attempt. The law is unneeded legislation and is nonsense because it's not the bank's or the government's concern. Under the previous law or the new law, the judgment debtor always had he right to object to a levy and if any of their funds turned out to be exempt, a judge could rule accordingly.
Mark Shapiro - Judgment Broker - http://www.JudgmentReferral.com - where Judgments go and are quickly Collected!