Bank levy helps the lenders to get back their fund by freezing debit of a bank account holder. Instead it helps the lender to withdraw entire money from that account.
Becoming a loan defaulter is not at all a new thing. Many borrowers after borrowing loan unable to repay the outstanding amount. As a result he needs to face consequences.
One of the common consequence of loan defaulter is low credit score. When a person defaults in repayment then it directly reflects to his credit score. However, if the intermediary is bank then it takes the decision against the borrower. At this point bank levy comes into scenario to help the lenders.
What is bank levy on savings account?
It refers to a legal action which generally bank takes on account holders who have taken loan but missing repayment continuously. During bank levy, the financial intermediary freezes the savings account as no debit. Therefore, an account holder is unable to withdraw money.
On the other hand, inspite of no debit mark, the lender is free to withdraw all the remaining fund from that account. The lender has the authority to withdraw money because the borrower failed to repay the entire amount. However, this process is not at all simple.
As, the lender needs to prove the fact that his borrower has defaulted repayment again and again. After that, a lender needs to make a request to the respective bank of the borrower. During request he also needs to show the legal notice against the borrower. On the basis of all these a bank levy takes place.
The process of bank levy
Entire process of bank levy takes place step by step. But during these steps one can hardly know about the process is undergoing. These steps include,
- Levy for your account at the bank permits creditors to legally withdraw the funds from your bank account. If a bank is informed of this legal proceeding, it will immediately freeze your account and then transfer the required funds directly to the creditor. Your creditor will use the money to settle the amount of debt you have to pay.
- The lender has the details of your bank account during sanctioning the loan. Besides, now everyone would like to pay online even if it is a monthly installments. So, when a lender does not get the repayment on time continuously then he first appeal to the bank.
- This appeal must include legal documents against the borrower. After reviewing the documents bank used to freeze debit for the borrower. During this time, the respective bank does not inform the account holder anything about. Even the lender will not also make you alert about the upcoming situation.
- Bank levy is a tactics which a lender applies on the borrower after sending multiple notice to him. After sending such notices a lender takes such stern decision. So, in order to avoid such scenario it is better not to default even a single time.
Steps you can take to avoid bank levy
If you have good amount of money in your bank account and still not repaying the outstanding debt then bank levy takes place. It can bring financial crisis as well as ruin your credit history. However, you can drive out financial crisis by applying small payday loans for unemployed in UK.
But you must take actions so that bank levy will stop. Steps that you should take are,
By raising a dispute request
If you do not want to freeze the account balance, then you must raise a dispute request. If you raise a dispute request then it will represent that, the lender has brought false financial case against you. On that note, the processing of bank levy will stop for a certain time period.
Claim money by raising error request
Sometimes it happens that, instead of making debit freeze in real defaulter’s account, a bank employee mistakenly freeze your account. In such a condition, it becomes difficult to continue transaction. If such incident takes place then without wasting any time claim your money by raising error request.
Show bank that your identity theft
Anonymous people who used to hack the system for looting money, they used to fake their identity as a lender and request banks for freezing account. If the concerned employee failed to identify such cons then it becomes difficult to prevent money from being theft.
So, if you have faced such situation then file legal case immediately. It will help to get back your money soon.
Sometimes, it also happens that even after repaying the entire amount of old debt, lenders forget about the end date of repayment and file a case. So, if you are changing your residence then make sure you have informed the lender about that new address.