Minn. Stat. § 551.05
ATTORNEY'S SUMMARY EXECUTION UPON FUNDS AT A FINANCIAL INSTITUTION.
Redline — January 1, 2008 → current.View current text →
Current — January 1, 2024
As of January 1, 2008
Subdivision 1. Procedure.
Subdivision 1. Procedure.
When levying upon funds at a financial institution, this section must be complied with, in addition to the general provisions specified in section 551.04 .
When levying upon funds at a financial institution, this section must be complied with, in addition to the general provisions specified in section 551.04 .
Subd. 1a. Exemption notice.
Subd. 1a. Notice, instructions, and exemption notice.
If the writ of execution is being used by the attorney to levy funds of a judgment debtor who is a natural person and if the funds to be levied are held on deposit at any financial institution, the attorney for the judgment creditor shall serve with the writ of execution two copies of an exemption notice. The notice must be substantially in the form set forth below. Failure of the attorney for the judgment creditor to send the exemption notice renders the execution levy void, and the financial institution shall take no action. However, if this subdivision is being used to execute on funds that have previously been garnished in compliance with section 571.71 , the attorney for judgment creditor is not required to serve an additional exemption notice. In that event, the execution levy shall only be effective as to the funds that were subject to the prior garnishment. Upon receipt of the writ of execution and exemption notices, the financial institution shall retain as much of the amount due under section 550.04 as the financial institution has on deposit owing to the judgment debtor, but not more than 100 percent of the amount remaining due on the judgment, or $10,000, whichever is less.
If the writ of execution is being used by the attorney to levy funds of a judgment debtor who is a natural person and if the funds to be levied are held on deposit at any financial institution, the attorney for the judgment creditor shall serve with the writ of execution a notice, instructions, and two copies of an exemption notice. The notice, instructions, and exemption notice must be substantially in the form set forth below. Failure of the attorney for the judgment creditor to send these forms renders the execution levy void, and the financial institution shall take no action. However, if this subdivision is being used to execute on funds that have previously been garnished in compliance with section 571.71 , the attorney for judgment creditor is not required to serve an additional exemption notice. In that event, the execution levy shall only be effective as to the funds that were subject to the prior garnishment. Upon receipt of the writ of execution and exemption notices, the financial institution shall retain as much of the amount due under section 550.04 as the financial institution has on deposit owing to the judgment debtor, but not more than 100 percent of the amount remaining due on the judgment, or $10,000, whichever is less.
Subd. 1b. Form of notice.
The notice informing a judgment debtor that an execution levy has been used to attach funds of the judgment debtor to satisfy a claim must be substantially in the following form:
The notice must be a separate form and must be substantially in the following form:
An order for attachment, garnishment summons, or levy of execution (strike inapplicable language) has been served on ............. (bank or other financial institution where you have an account).
IMPORTANT NOTICE
YOUR FUNDS HAVE BEEN LEVIED
The Creditor has frozen money in your account at your financial institution.
Your account balance is $........
Your account balance is $.......
The amount being held is $........
The amount being held is $.......
However, all or a portion of the funds in your account will normally be exempt from creditors' claims if they are in one of the following categories:
(1) relief based on need. This includes the Minnesota Family Investment Program (MFIP), Work First Program, Medical Assistance (MA), General Assistance (GA), General Assistance Medical Care (GAMC), Emergency General Assistance (EGA), Minnesota Supplemental Aid (MSA), MSA Emergency Assistance (MSA-EA), Supplemental Security Income (SSI), and Energy Assistance;
(2) Social Security benefits (Old Age, Survivors, or Disability Insurance);
(3) unemployment benefits, workers' compensation, or veterans' benefits;
(4) an accident, disability, or retirement pension or annuity;
(5) life insurance proceeds;
(6) the earnings of your minor child and any child support paid to you; or
(7) money from a claim for damage or destruction of exempt property (such as household goods, farm tools, business equipment, a mobile home, or a car).
The following funds are also exempt:
(8) all earnings of a person in category (1);
(9) all earnings of a person who has received relief based on need, or who has been an inmate of a correctional institution, within the last six months;
(10) 75 percent of every judgment debtor's after tax earnings; or
(11) all of a judgment debtor's after tax earnings below 40 times the federal minimum wage.
TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:
Categories (10) and (11): 20 days
Categories (8) and (9): 60 days
All others: no time limit, as long as funds are traceable to the exempt source. (In tracing funds, the first-in, first-out method is used. This means money deposited first is spent first.) The money being sought by the judgment creditor is being held in your account to give you a chance to claim an exemption.
TO CLAIM AN EXEMPTION:
Fill out, sign, and mail or deliver one copy of the attached exemption claim form to the institution which sent you this notice and mail or deliver one copy to the judgment creditor's attorney. The address for the judgment creditor's attorney is set forth below. Both copies must be mailed or delivered on the same day.
NOTE: You may help resolve your claim faster if you send to the creditor's attorney written proof or documents that show why your money is exempt. If you have questions regarding the documents to send as proof of an exemption, call the creditor's attorney. If you do not send written proof and the creditor's attorney has questions about your exemption claim, the creditor's attorney may object to your claim which may result in a further delay in releasing your exempt funds.
If they do not get the exemption claim back from you within 14 days of the date they mailed or gave it to you, they will be free to turn the money over to the attorney for the judgment creditor. If you are going to claim an exemption, do so as soon as possible, because your money may be held until it is decided.
IF YOU CLAIM AN EXEMPTION:
The amount being held will be frozen for 14 days from the date of this notice.
Some of your money in your account may be protected (the legal word is exempt). You may be able to get it sooner than 14 days if you act quickly and follow the instructions on the next page.
The attached exemption form lists some different sources of money in your account that may be protected. If your money is from one or more of these sources, place a check on the line on the form next to the sources of your money. If it is from one of these sources, the Creditor cannot take it.
BUT, you must follow the instructions and return the exemption form and copies of your bank statements from the last 60 days to have the bank unfreeze your money. If you do not follow the instructions, your financial institution will give the money to the Creditor. If that happens and it is protected, you can still get it back from the Creditor later, but that is not as easy to do as filling in the form now.
See next pages for instructions and the exemption form.
Subd. 1c. Form of instructions.
The instructions required must be in a separate form and must be substantially in the following form:
INSTRUCTIONS
Note: The creditor is who you owe the money to. You are the debtor.
1. Fill out both of the attached exemption forms in this packet.
If you check one of the lines, you should also give proof that shows that some or all of the money in your account is from one or more of the protected sources. Creditors may ask for a hearing if they question your exemptions. To avoid a hearing:
Case numbers should be added to the form. Copies of documents should be sent with the form.
NOTICE: YOU MUST SEND TO THE CREDITOR'S ATTORNEY (OR TO THE CREDITOR, IF NO ATTORNEY) COPIES OF YOUR BANK STATEMENTS FOR THE PAST 60 DAYS BEFORE THE LEVY. Keep a copy of your bank statements in case there are questions about your claim. If you do not send to the creditor's attorney (or to the creditor, if no attorney) bank statements with your exemption claim, the financial institution may release your money to the creditor.
2. Sign the exemption forms. Make one copy to keep for yourself.
3. Mail or deliver the other copies of the form by (insert date).
BOTH COPIES MUST BE MAILED OR DELIVERED THE SAME DAY.
One copy of the form and the copies of your bank statements go to:
One copy goes to:
HOW THE PROCESS WORKS
If You Do Not Send in the Exemption Form and Bank Statements:
14 days after the date of this letter some or all of your money may be turned over to the creditor pursuant to Minnesota statute.
If You Send in the Exemption Form and Bank Statements:
Any money that is NOT protected can be turned over to the creditor.
(2) the financial institution will keep holding the money claimed to be exempt; and
(3) seven days after receiving your exemption claim, the financial institution will release the money to you unless before then it receives an objection to your exemption claim.
IF THE JUDGMENT CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:
the institution will hold the money until a court decides if your exemption claim is valid, BUT ONLY IF the institution gets a copy of your court motion papers asserting the exemption WITHIN TEN DAYS after the objection is personally served on you, or within 13 days from the date the objection is mailed to you. You may wish to consult an attorney at once if the judgment creditor objects to your exemption claim.
MOTION TO DETERMINE EXEMPTION:
At any time after your funds have been held, you may ask for a court decision on the validity of your exemption claim by filing a request for hearing which may be obtained at the office of the court administrator of the above court.
If the Creditor Does Not Object:
The financial institution will unfreeze your money six business days after the institution gets your completed form.
If the Creditor Objects:
The money you have said is protected on the form will be held by the bank. The creditor has six business days to object (disagree) and ask the court to hold a hearing. You will receive a Notice of Objection and a Notice of Hearing.
The financial institution will hold the money until a court decides whether your money is protected or not. Some reasons a creditor may object are because you did not send copies of your bank statements or other proof of the benefits you received. Be sure to include these when you send your exemption form.
You may want to talk to a lawyer for advice about this process. If you are low income you can call Legal Aid.
PENALTIES:
PENALTIES:
If you claim an exemption in bad faith, or if the judgment creditor wrongly objects to an exemption in bad faith, the court may order the person who acted in bad faith to pay costs, actual damages, attorney fees, and an additional amount of up to $100.
If you claim that your money is protected and a court decides you made that claim in bad faith, the court can order you to pay costs, actual damages, attorney fees, and an additional amount of up to $100. For example, it may be bad faith if you claim you receive government benefits that you do not receive.
EXEMPTION:
(a) Amount of exemption claim.
/ / I claim ALL the funds being held are exempt.
/ / I claim SOME of the funds being held are exempt.
(b) Basis for exemption.
Of the 11 categories listed above, I am in category number ............ (If more than one category applies, you may fill in as many as apply.) The source of the exempt funds is the following:
.
.
.
(If the source is a type of relief based on need, list the case number and county:
case number: ...............;
county: ....................)
I hereby authorize any agency that has distributed relief to me or any correctional institution in which I was an inmate to disclose to the above named judgment creditor's attorney only whether or not I am or have been a recipient of relief based on need or an inmate of a correctional institute within the last six months.
I have mailed or delivered a copy of the exemption notice to the judgment creditor's attorney at the address indicated above.
Subd. 2. Effect of exemption notice.
Within two business days after receipt of the execution levy and exemption notices, the financial institution shall serve upon the judgment debtor two copies of the exemption notice. The financial institution shall serve the notice by first class mail to the last known address of the judgment debtor. If no claim of exemption is received by the financial institution within 14 days after the exemption notices are mailed to the judgment debtor, the funds remain subject to the execution levy and shall be remitted to the judgment creditor's attorney within seven days. If the judgment debtor elects to claim an exemption, the judgment debtor shall complete the exemption notice, sign it under penalty of perjury, and deliver one copy to the financial institution and one copy to the attorney for the judgment creditor within 14 days of the date postmarked on the correspondence mailed to the judgment debtor containing the exemption notices. Failure of the judgment debtor to deliver the executed exemption notice does not constitute a waiver of any claimed right to an exemption. Upon timely receipt of a claim of exemption, funds not claimed to be exempt by the judgment debtor remain subject to the execution levy. All money claimed to be exempt shall be released to the judgment debtor upon the expiration of seven days after the date postmarked on the envelope containing the executed exemption notice mailed to the financial institution, or the date of personal delivery of the executed exemption notice to the financial institution, unless within that time the attorney for the judgment creditor interposes an objection to the exemption.
Subd. 3. Objection to exemption claim.
Objection shall be interposed by mailing or delivering one copy of the written objection to the financial institution and one copy of the written objection to the judgment debtor along with a copy of the judgment debtor's claimed exemption form. Both copies of an objection to an exemption claim shall be mailed or delivered on the same date. The financial institution may rely on the date of mailing or delivery of a notice to it in computing any time periods in this section. The written objection must be substantially in the form specified in subdivision 5.
Subd. 4. Duties of financial institution if objection is made to exemption claim.
Upon receipt of a written objection from the judgment creditor within the specified seven-day period, the financial institution shall retain the funds claimed to be exempt. Unless the financial institution receives a request for hearing and notice of hearing from the judgment debtor asserting exemption rights within ten days after receipt of a written objection to the exemption, the funds remain subject to the execution levy as if no claim of exemption had been made and shall be remitted to the judgment creditor's attorney within seven days. If a request for hearing and notice of hearing to determine the validity of a claim of exemption is received by the financial institution within the period provided, it shall retain the funds claimed to be exempt until otherwise ordered by the court.
Subd. 5. Notice of objection.
(a) The written objection to the judgment debtor's claim of exemption must be in substantially the following form:
The judgment creditor objects to your claim for exemption from garnishment, levy of execution, order for attachment (strike inapplicable language) for the following reason(s):
.
.
.
Because of this objection, your financial institution will retain the funds you claimed to be exempt for an additional ten days. If you wish to request a hearing on your exemption claim, you need to do so within ten days from the date the objection was personally served on you, or within 13 days from the date the objection was mailed to you. You may request a hearing by completing the attached form and filing it with the court administrator.
1. The court administrator's office shall provide clerical assistance to help with the writing and filing of a Request for Hearing by any person not represented by counsel. The court administrator may charge a fee of $1 for the filing of a Request for Hearing.
2. Upon the filing of a Request for Hearing, the court administrator shall schedule the matter for a hearing no later than five business days from the date of filing. The court administrator shall forthwith send a completed copy of the request, including the hearing date, time, and place to the adverse party and to the financial institution by first class mail.
3. If it is possible that the financial institution might not receive the request mailed from the court administrator within ten days, then you may want to personally deliver a copy of the request to the financial institution after you have filed your request with the court.
4. An order stating whether your funds are exempt shall be issued by the court within three days of the date of the hearing.
If you do not file a Request for Hearing within ten days of the date the objection was personally served on you, or within 13 days from the date the objection was mailed to you, your financial institution may turn your funds over to your judgment creditor.
If you file a Request for Hearing and your financial institution receives it within ten days of the date it received this objection, your financial institution will retain your funds claimed to be exempt until otherwise ordered by the court.
Subd. 6. Request for hearing and notice for hearing.
The request for hearing accompanying the objection notice must be in substantially the following form:
I hereby request a hearing to resolve the exemption claim which has been made in this case regarding funds in the account of ............. (Judgment Debtor) at the ......... (Financial Institution).
I believe the property being held is exempt because
.
.
(Note to both parties: Bring with you to the hearing all documents and materials relevant to the exemption claim and objection. Failure to do so could delay the court's decision.)
Subd. 7. Release of funds.
At any time during the procedure specified in this section, the judgment debtor or the attorney for the judgment creditor may, by a writing dated after the service of the writ of execution, direct the financial institution to release the funds in question to the other party. Upon receipt of a release, the financial institution shall release the funds as directed.
Subd. 8. Subsequent proceedings; bad faith claims.
If in subsequent proceedings brought by the judgment debtor or the judgment creditor, the claim of exemption is not upheld, and the court finds that it was asserted in bad faith, the judgment creditor shall be awarded actual damages, costs, and reasonable attorney fees resulting from the additional proceedings, and an amount not to exceed $100. If the claim of exemption is upheld, and the court finds that the judgment creditor disregarded the claim of exemption in bad faith, the judgment debtor shall be awarded costs, reasonable attorney fees, actual damages, and an amount not to exceed $100. The underlying judgment must be modified to reflect assessment of damages, costs, and attorney fees. However, if the party in whose favor a penalty assessment is made is not actually indebted to the party's attorney for fees, the attorney's fee award shall be made directly to the attorney and if not paid, an appropriate judgment in favor of the attorney shall be entered. Upon motion of any party in interest, on notice, the court shall determine the validity of any claim of exemption, and may make any order necessary to protect the rights of those interested. No financial institution is liable for damages for complying with this section. Both copies of an exemption claim or an objection to an exemption claim must be mailed or delivered on the same date. The financial institution may rely on the date of mailing or delivery of a notice to it in computing any time periods in this section.
If the creditor made a bad faith objection to your claim that your money is protected, the court can order them to pay costs, actual damages, attorney fees, and an additional amount of up to $100.
Subd. 1d. Form of exemption form.
The exemption form required by this subdivision must be a separate form and must be in substantially the following form:
EXEMPTION FORM
You may have assistance based on need from another source that is not on the list. If you do, check this box, and fill in the source of your money on the line below:
Source: .
Include copies of any documents you have that show the source of this money.
I give permission to any agency that has given me cash benefits to give information about my benefits to the above-named creditor, or its attorney. The information will ONLY concern whether I get benefits or not, or whether I have gotten them in the past six months.
If I was an inmate in the last six months, I give my permission to the correctional institution to tell the above-named creditor that I was an inmate there.
YOU MUST SIGN AND SEND THIS FORM BACK TO THE CREDITOR'S ATTORNEY (OR TO THE CREDITOR, IF NO ATTORNEY) AND THE BANK. REMEMBER TO INCLUDE A COPY OF YOUR BANK STATEMENTS FOR THE PAST 60 DAYS. FILL IN THE BLANKS BELOW AND GO BACK TO THE INSTRUCTIONS TO MAKE SURE YOU DO IT CORRECTLY.
I have mailed or delivered a copy of this form to:
I have also mailed or delivered a copy of this exemption form to my bank at the address listed in the instructions.
Subd. 2. Effect of exemption notice.
Within two business days after receipt of the execution levy and the notice, instructions, and two copies of the exemption notices, the financial institution shall serve upon the judgment debtor the notice, instructions, and two copies of the exemption notice. The financial institution shall serve the notice by first class mail to the last known address of the judgment debtor. If no claim of exemption is received by the financial institution within 14 days after the exemption notices are mailed to the judgment debtor, the funds remain subject to the execution levy and shall be remitted to the judgment creditor's attorney within six business days. If the judgment debtor elects to claim an exemption, the judgment debtor shall complete the exemption notice, sign it under penalty of perjury, and deliver one copy to the financial institution and one copy to the attorney for the judgment creditor within 14 days of the date postmarked on the correspondence mailed to the judgment debtor containing the exemption notices. The debtor is also required to include copies of bank statements for the prior 60 days with the exemption notice. In the event that there is no attorney for the judgment creditor, the notice must be sent directly to the judgment creditor. Failure of the judgment debtor to deliver the executed exemption notice or copies of the required bank statements for the prior 60 days does not constitute a waiver of any claimed right to an exemption. Upon timely receipt of a claim of exemption, funds not claimed to be exempt by the judgment debtor remain subject to the execution levy. All money claimed to be exempt shall be released to the judgment debtor upon the expiration of six business days after the date postmarked on the envelope containing the executed exemption notice mailed to the financial institution, or the date of personal delivery of the executed exemption notice to the financial institution, unless within that time the attorney for the judgment creditor interposes an objection to the exemption.
Subd. 3. Objections and request for hearing.
An objection shall be interposed, within six business days of receipt by the creditor of an exemption claim from the debtor, by mailing or delivering one copy of the Notice of Objection and Notice of Hearing to the financial institution and one copy of the Notice of Objection and Notice of Hearing to the debtor. The financial institution may rely on the date of mailing or delivery of a notice to it in computing any time periods in this section. The Notice of Objection and Notice of Hearing form must be substantially in the form set out in subdivision 5.
The court administrator may charge a fee of $1 for the filing of a Notice of Objection and Notice of Hearing. Upon the filing of a Notice of Objection and Notice of Hearing, the court administrator shall schedule the matter for hearing no sooner than five business days but no later than seven business days from the date of filing. A debtor may request continuance of the hearing by notifying the creditor and the court. The court shall schedule the continued hearing within seven days of the original hearing date.
An order stating whether the debtor's funds are exempt shall be issued by the court within three days of the date of the hearing.
Subd. 4. Duties of financial institution if objection is made to exemption claim.
Upon receipt of a Notice of Objection and Notice of Hearing from the creditor within the specified six-day period, the financial institution shall retain the funds claimed to be exempt. The financial institution shall retain the funds claimed to be exempt until otherwise ordered by the court, upon mutual agreement of the parties, or until the garnishment lapses pursuant to subdivision 7.
Subd. 5. Form of Notice of Objection and Notice of Hearing.
The Written Objection and Notice of Hearing must be in substantially the following form:
The creditor objects to your claim of exemption from levy of execution for the following reason(s):
(Note: Bring with you to the hearing all documents and materials supporting your exemption claim. Failure to do so could delay the court's decision. )
If the creditor receives all documents and materials supporting your exemption claim before the hearing date, the creditor may agree with your exemption claim and you might be able to avoid a hearing.
Because a court hearing will be held on your claim that your funds are protected, your financial institution will retain the funds until it receives an order from the court or upon mutual agreement between you and the creditor.
Subd. 6.
MS 2008 [Repealed by amendment, 2009 c 31 s 3 ]
Subd. 7. Release of funds.
At any time during the procedure specified in this section, the judgment debtor or the attorney for the judgment creditor may, by a writing dated after the service of the writ of execution, direct the financial institution to release the funds in question to the other party. Upon receipt of a release, the financial institution shall release the funds as directed.
Subd. 8. Subsequent proceedings; bad faith claims.
If in subsequent proceedings brought by the judgment debtor or the judgment creditor, the claim of exemption is not upheld, and the court finds that it was asserted in bad faith, the judgment creditor shall be awarded actual damages, costs, and reasonable attorney fees resulting from the additional proceedings, and an amount not to exceed $100. If the claim of exemption is upheld, and the court finds that the judgment creditor disregarded the claim of exemption in bad faith, the judgment debtor shall be awarded costs, reasonable attorney fees, actual damages, and an amount not to exceed $100. The underlying judgment must be modified to reflect assessment of damages, costs, and attorney fees. However, if the party in whose favor a penalty assessment is made is not actually indebted to the party's attorney for fees, the attorney's fee award shall be made directly to the attorney and if not paid, an appropriate judgment in favor of the attorney shall be entered. Upon motion of any party in interest, on notice, the court shall determine the validity of any claim of exemption, and may make any order necessary to protect the rights of those interested. No financial institution is liable for damages for complying with this section. Both copies of an exemption claim or an objection to an exemption claim must be mailed or delivered on the same date. The financial institution may rely on the date of mailing or delivery of a notice to it in computing any time periods in this section.
Official source: Minnesota Office of the Revisor of Statutes. Reproduced from public-domain Minnesota statutes; confirm against the official source for the current text. Not legal advice.