A. No judgment creditor or attorney for a judgment creditor shall have a notice of lien served on a financial institution under § 8.01-502 unless such judgment creditor or attorney has a reasonable basis for believing that the judgment debtor is entitled to a payment from such institution. The fact that a financial institution is doing business in a geographic area where the judgment debtor resides, works or has a place of business is not, by itself, a reasonable basis for believing that the judgment debtor is entitled to a payment from a financial institution. Any person violating this section shall be liable to a financial institution for the sum of $100 for each notice of lien wrongfully served on such institution. In any action at law to recover an amount due hereunder, the judgment creditor or attorney for the judgment creditor causing the notice of lien to be served on the financial institution shall have the burden of showing a reasonable basis for believing that the judgment debtor was entitled to a payment from such institution.
§ 8.01-502.1.Serving notice of lien on financial institution.
Chapter 18. Executions and Other Means of Recovery · Article 5. Lien on Property Not Capable of Being Levied On · Last amended 2010 · Last verified July 16, 2026
In one sentenceBefore serving a notice of lien on a financial institution, a judgment creditor must have a reasonable basis for believing the debtor holds funds there, faces a $100 penalty per wrongful notice, must mail the debtor a copy plus an exemption form within five business days, and the institution then has 21 days to state how much it holds.
Full Text of § 8.01-502.1
B. Any judgment creditor serving a notice of lien on a financial institution shall, within five business days of such service, mail to the judgment debtor at his last known address a copy of the notice of lien along with a notice of exemptions and claim for exemption form in accordance with § 8.01-512.4. The judgment creditor or attorney for the judgment creditor shall file a certification with the court affirming that he has mailed the judgment debtor these notices. In the event that the judgment creditor fails to comply with the requirements of this subsection, he shall be liable to the judgment debtor for no more than $100 in damages, unless he proves by a preponderance of the evidence that the failure was not willful.
C. A financial institution served with a valid notice of lien shall provide a written response to the judgment creditor or attorney for the judgment creditor within twenty-one days after being served with such notice of lien indicating the amount of money held by the financial institution pursuant to the notice of lien.
Plain-English Summary
A creditor could, in theory, send lien notices to every bank in the state hoping one hits. Section 8.01-502.1 shuts that down. Before serving a financial institution, the creditor or the attorney must have a reasonable basis for believing the debtor holds a payment there. Knowing that a bank does business in the debtor’s neighborhood is not enough on its own.
Get it wrong and there is a price: $100 payable to the financial institution for each notice wrongfully served, recoverable in a civil suit where the creditor carries the burden of showing the reasonable basis existed.
The section also protects the debtor. Within five business days of serving the bank, the creditor must mail the debtor a copy of the notice along with the exemption notice and claim form described in § 8.01-512.4, and file a certification with the court confirming the mailing happened. Skip that step and the creditor risks up to $100 in damages to the debtor, unless the creditor proves the lapse was not willful.
On the institution’s side, once served with a valid notice, the bank has 21 days to respond in writing stating how much money it holds under the notice — giving everyone a clear, time-bound answer instead of an open-ended freeze.
Frequently Asked Questions
Can a creditor serve a lien notice on any bank on the theory the debtor might bank there?
No. The creditor must have a reasonable basis for believing the debtor is entitled to a payment from that particular institution; doing business in the debtor’s area alone is not enough.
What is the penalty for wrongfully serving a notice of lien on a financial institution?
$100 for each notice wrongfully served, recoverable as damages, with the creditor bearing the burden of showing a reasonable basis for the notice.
What must the creditor send the debtor after serving a bank?
Within five business days, a copy of the notice of lien and the notice of exemptions and claim form required by § 8.01-512.4, plus a certification filed with the court confirming the mailing.
What happens if the creditor fails to send the required notice to the debtor?
The creditor is liable to the debtor for up to $100 in damages, unless the creditor proves by a preponderance of the evidence that the failure was not willful.
How long does a financial institution have to respond to a valid notice of lien?
Twenty-one days after being served, stating in writing the amount of money it holds under the notice.
Amendment History
1997, c. 750; 1999, c. 48; 2010, c. 673.
Source & verification. Section text and amendment history are
reproduced verbatim from the Code of Virginia, published by the
Code of Virginia, Virginia Division of Legislative Automated Systems. Last verified July 16, 2026.
· Official source
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