“Levy” is a legal term most commonly used in the business world that refers to the collection or imposition of something, usually a tax, charge, or other payment. It is often used to describe the action taken by a government body on individuals or businesses, as they are legally obligated to pay certain fees or dues. In some cases, levy is also used to describe the enforcement of a court order, such as when a creditor takes action against a debtor.
Types of Levy
When talking about levy it generally refers to three key types: civil, criminal, and executive.
Civil Levy:
Civil levy is most commonly used by creditors to recover debts owed to them. It is an enforcement action taken against bank accounts, wages, or other property of the debtor, giving the creditor a legal right to take possession of the resources to help recover the debt. This action typically requires the creditor to go to court in order to get a legal judgment in their favor.
Criminal Levy:
Criminal levy is shortly associated with criminal charges. It is a type of court order used by the government to force individuals or financial institutions to surrender assets to the government. It could be property, money, or other forms of assets that the government believes to have been received as a result of a criminal act.
Executive Levy:
Executive levy is used by the government to collect dues or debts. Commonly, this includes money owed to a state or federal agency such as Uncle Sam. This action is typically used to collect overdue taxes, unpaid fines, or other governmental fees. It typically requires the debtor or creditor to receive a notice from the government informing them of the levy and giving them 30 days to respond to the notice.
Example of Levy in the Modern Business World
Taxes are one of the most common forms of levy that businesses and individuals are familiar with. For example, the government levies taxes on business revenues and income, which must be paid according to the applicable laws. Failure to comply with these laws can lead to the government taking further action, such as criminal penalties or asset seizure.
Understanding Levy and Your Rights
Levy is a vital legal concept to understand, as it is used in various situations. If you’re a business owner, it’s important to be familiar with the types of levy that your business can be subjected to and to understand your rights and responsibilities when it comes to making payments. It’s also important to keep up to date on any changes to tax laws and other relevant regulations.