If you’ve received notice of a Denver bank account garnishment or an IRS bank levy, time is critical. A bank levy allows creditors or the IRS to freeze and seize funds from your account to satisfy unpaid debts.
Fortunately, there are legal ways to stop or release a Denver IRS bank levy, and the tax professionals at Instant Tax Solutions can help you take immediate action.
Understanding a Denver Bank Levy
A bank levy, also known as a Denver bank garnishment, is a serious legal action that allows a creditor—such as the IRS, the state of Colorado, or a private lender—to freeze and seize funds directly from your bank account to satisfy unpaid debts. This action can occur without prior warning, leaving you with limited access to your funds and potentially causing financial hardship.
Common Reasons for a Bank Levy
A Denver bank levy can be initiated for various reasons, including:
- Unpaid Taxes: If you owe federal or state taxes, the IRS or Colorado Department of Revenue can levy your bank account to collect the outstanding balance.
- Court Judgments: Creditors who have won a lawsuit against you for unpaid debts can secure a judgment and enforce a levy to recover what is owed.
- Unpaid Child Support or Student Loans: Government agencies have the authority to impose a levy for overdue child support or federal student loan defaults.
- Defaulted Personal or Business Debts: If you’ve fallen behind on personal loans, credit card payments, or business-related debts, creditors may pursue legal action that results in a bank levy.
The Urgency of Taking Action
If you’ve received notice of a Denver IRS bank levy, it’s critical to act quickly. Once a levy is in place, your bank is required to freeze the specified amount and transfer it to the creditor—often leaving you with little or no access to your own money.
In many cases, the funds are permanently withdrawn unless you successfully challenge the levy or negotiate a resolution.
Ignoring the Denver bank levy process can lead to serious financial consequences, including bounced checks, missed bill payments, and ongoing collection efforts. Fortunately, there are legal ways to fight a bank levy and regain control of your finances, but swift action is essential.
How to Release a Denver Bank Account Garnishment
Identify the Source of the Levy
Start by determining which creditor initiated the Denver bank account garnishment. The notice you received should indicate whether the levy comes from the IRS, the Colorado Department of Revenue, or a private creditor.
Consult a Denver Bank Attorney
Navigating the legal complexities of a bank levy can be overwhelming. A Denver bank levy lawyer can assess your situation and develop a plan to challenge the levy, negotiate with creditors, or file exemptions.
At Instant Tax Solutions, our experienced team can guide you through the process of stopping an IRS bank levy quickly and effectively.
Negotiate With the Creditor
In many cases, creditors—including the IRS—may agree to release a bank levy if you:
- Set up a payment plan
- Pay a portion of the debt as a settlement
- Provide proof of financial hardship
The IRS often lifts bank levies if you enter into an Installment Agreement or Currently Not Collectible status, which we can help arrange.
File Exemptions or Hardship Claims
Colorado law allows certain funds to be exempt from garnishment, such as:
- Social Security benefits
- Disability benefits
- Unemployment compensation
- Retirement funds
If your bank account contains exempt funds, you may be able to file a claim and have the levy lifted.
Work With the Bank to Unfreeze Your Account
Once a levy is released, the bank will typically unfreeze your funds within a few days. Our team at Instant Tax Solutions can work directly with your bank and creditors to speed up this process.
Levy Laws Explained by a Denver Bank Levy Attorney
In Colorado, bank levies—also known as garnishments—are legal mechanisms that allow creditors to seize funds directly from a debtor’s bank account to satisfy unpaid debts. This process is governed by specific state laws designed to balance the rights of creditors with protections for debtors.
Initiation of a Bank Levy
Creditors must first obtain a court judgment against the debtor. Once this judgment is secured, the creditor can request a Writ of Garnishment from the court.
This writ authorizes the creditor to direct the debtor’s bank (the garnishee) to freeze and eventually transfer funds from the debtor’s account to satisfy the debt. The bank is obligated to comply upon receiving the writ.
The debtor is then notified of the garnishment and has a limited timeframe to respond or object.
Exemptions and Protected Funds
Colorado law provides certain exemptions to protect specific funds from garnishment:
- Public Assistance and Benefits: Funds from sources such as Social Security benefits, unemployment compensation, and workers’ compensation are generally exempt from garnishment. These protections ensure that individuals retain access to essential support.
- Wages: A portion of a debtor’s wages is protected. As of 2025, the law exempts 80% of disposable earnings or an amount equivalent to 40 times the state or federal minimum wage per week, whichever is greater. This means that if a debtor’s weekly earnings are $740.50 or less, they are fully exempt from garnishment.
- Bank Account Funds: Up to $2,500 in a debtor’s bank account is exempt from garnishment. This exemption helps ensure that debtors have access to basic funds necessary for living expenses.
Procedure for Claiming Exemptions
Upon receiving a garnishment notice, debtors have the right to claim exemptions for protected funds. To do so, they must file a written objection, often referred to as a “Claim of Exemption,” with the court within 14 days of being served with the writ.
This filing should detail the nature of the funds and the basis for exemption. A hearing may be scheduled to assess the validity of the claimed exemptions.
Legislative Updates
In 2019, Colorado enacted House Bill 19-1189, which reformed wage garnishment laws. Key changes included reducing the garnishment rate from 25% to 20% of disposable earnings and increasing the amount of earnings exempt from garnishment.
Additionally, the law now allows for deductions of health insurance premiums from disposable earnings before calculating garnishable amounts.
Important Points
- Joint Accounts: Funds in joint bank accounts can be subject to garnishment if one account holder has a judgment against them. It’s crucial to understand how joint ownership may impact the protection of funds.
- Timely Response: Debtors must act promptly upon receiving a garnishment notice. Failing to file a Claim of Exemption within the specified timeframe can result in the loss of protected funds.
- Legal Assistance: Navigating the complexities of bank levies and garnishments can be challenging. Consulting with a legal professional can provide guidance tailored to individual circumstances and help ensure that debtors’ rights are protected.
Understanding these laws and procedures is essential for both creditors seeking to collect debts and debtors aiming to protect their assets within the legal framework established by Colorado law.
How to Prevent a Future Denver IRS Bank Levy
A bank levy can be a stressful and financially damaging situation, but there are proactive steps you can take to prevent it from happening again. By staying ahead of potential tax issues and working with professionals, you can protect your assets and financial stability.
Here are some key strategies to prevent another Denver IRS bank levy in the future:
Proactively Resolve Tax Debts Before Collection Actions Begin
The best way to avoid a bank levy is to address any outstanding tax debts before the IRS takes action. This means:
- Filing your tax returns on time to prevent unnecessary penalties and interest.
- Paying any taxes owed as soon as possible to keep your account in good standing.
- Keeping communication open with the IRS, as ignoring notices can lead to enforced collection actions.
Set Up Payment Arrangements Before a Levy Is Issued
If you are unable to pay your tax debt in full, the IRS offers several options to help you manage your obligations without facing aggressive collection efforts. These include:
- Installment Agreements: A structured plan that allows you to pay off your tax debt in manageable monthly payments.
- Offer in Compromise (OIC): A settlement option that may allow you to pay less than the full amount owed if you qualify.
- Currently Not Collectible (CNC) Status: If you’re facing financial hardship, the IRS may temporarily halt collection efforts until your situation improves.
By working with the IRS to establish a formal agreement, you can avoid enforced actions like bank levies and wage garnishments.
Consult Instant Tax Solutions for Ongoing Guidance
Navigating IRS tax issues can be complex, and having professional support can make a significant difference. A tax relief firm, such as Instant Tax Solutions, can help you:
- Analyze your tax situation and identify the best resolution strategy.
- Negotiate with the IRS to secure favorable payment terms.
- Ensure compliance with tax laws to prevent future collection actions.
- Provide ongoing support and guidance to keep your finances on track.
By taking a proactive approach to tax debt management and seeking expert assistance when needed, you can safeguard your financial future and avoid the stress of another IRS bank levy.
Why Choose Instant Tax Solutions?
Navigating complex tax issues requires a partner you can trust. Instant Tax Solutions (ITS) stands out as a premier tax relief firm, offering a blend of expertise, integrity, and proven results. Here’s why ITS is the right choice for resolving your tax concerns:
1. Proven Track Record of Success
Since its establishment in 2008, ITS has been dedicated to helping clients achieve significant tax debt reductions. With an average client savings of $13,294, our team has consistently delivered favorable outcomes, including substantial reductions in tax liabilities.
2. Accredited and Trusted
ITS is accredited by the Better Business Bureau (BBB) with an A+ rating, reflecting our commitment to ethical practices and customer satisfaction. This accreditation underscores our dedication to maintaining the highest standards in the industry.
3. Comprehensive Tax Relief Services
We offer a wide range of services tailored to meet diverse tax-related needs, including:
- Offer in Compromise: Negotiating settlements to reduce overall tax debt.
- Installment Agreements: Establishing manageable payment plans.
- Penalty Abatement: Requesting reductions or eliminations of penalties.
- Innocent Spouse Relief: Protecting clients from liabilities incurred by spouses.
- Bank Levy and Wage Garnishment Releases: Lifting levies and garnishments to restore financial stability.
Our experienced Denver tax attorneys work diligently to identify and implement the most effective solutions for each client’s unique situation.
4. Transparent and Ethical Practices
At ITS, we prioritize honesty and transparency. Our team provides clear explanations of available options, potential outcomes, and associated costs, ensuring clients are well-informed throughout the process.
We are committed to delivering on our promises and maintaining open communication.
5. Personalized Client Support
Understanding that each tax situation is unique, we offer personalized support tailored to individual needs. Our consultants take the time to understand your specific circumstances, crafting customized strategies to achieve the best possible results.
This client-focused approach has earned us numerous positive testimonials.
6. Nationwide Availability
With offices across the United States, including locations in Boise, Coeur d’Alene, Houston, Los Angeles, Portland, and Spokane, ITS is equipped to assist clients nationwide. Our extensive reach ensures that professional tax relief services are accessible, regardless of your location.
7. Commitment to Client Education
We believe in empowering clients through education. Our team provides resources and guidance to help you understand your tax problem and the relief options available, enabling you to make informed decisions about your financial future.
Choosing Instant Tax Solutions means partnering with a firm that combines expertise, integrity, and a client-centered approach to resolve your tax challenges effectively. Let us help you navigate the complexities of tax debt relief and achieve the financial peace of mind you deserve.
Need the Help of a Denver Bank Levy Lawyer? Contact Instant Tax Solutions Today!
A Denver bank account garnishment can be financially devastating, but you don’t have to face it alone. Instant Tax Solutions has helped thousands of individuals resolve bank levies, tax debts, and other financial crises.
Call us today at (888) 946-2999 for a free consultation, and let our expert tax professionals help you regain control of your finances.
