After a creditor wins a judgment against you to collect debt, one of the tools that it could use is a bank account levy. This is a process in which the creditor takes money directly out of your bank account. While this can make you lose money in your account, you may still be able to cash checks at your bank.
Bank Account Levy
When a creditor levies your bank account, that entitles it to take money that is already in your bank account. It does not entitle the creditor to take money that you have not earned yet or that is not located in your bank account. This means that the creditor cannot put any restrictions on your ability to cash checks. If your paycheck was directly deposited in your account before, you could change it to a paper check to avoid the levy.
Although a creditor cannot technically impose limitations on what you do with your paycheck, your bank's policies will have a big impact on what you can do. Your bank may not be willing to cash your check if you have an account with a levy placed on it. Whether a check can be cashed is entirely up to the rules of your bank. To find out, you can contact your bank and ask about cashing the check.
When you have a levy placed on your bank account, you could potentially open an account with another bank. The bank account levy is a provision that only applies to that individual bank account. If you have any other bank accounts, they are not tied to this order. The creditor would have to do additional research and get another court order to place a levy on the new bank account. This may be an alternative to help you cash your check if your primary bank will not.
Check Cashing Services
If you need to cash your paycheck, you do not necessarily need to have a bank account anywhere. A number of services offer the ability to cash a check. With these services, you usually have to pay a nominal fee to have your check cashed. While the fees can add up, they are much less costly than potentially losing all of the money in your account to a bank account levy.