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The definition of a garnishment in the rule “Garnishment of Accounts Containing Federal Benefit Payments” includes a levy. Does that mean that we should be applying the same account review to levies, state or IRS? Or should some types of levies be reviewed differently, or does any pat of the rule apply differently?
My understanding for the levy in a garnishment is that both are collection tools to seize assets. When researching the difference levies will apply to financial accounts and the garnishment will apply to wages placed into the account.
A levy allows a creditor to withdraw money from a financial account—most commonly, a checking or savings account. With a levy you will be freezing a financial account and then taking the money in that account and sending to cover the request.
A garnishment will instruct the FI to take a portion of deposited wage (following the exclusions) and sending them where instructed.
With the different types of definition’s for the two types you may just want to make sure your procedures are written for the little differences.
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