US Supreme Court Rules that Inherited IRA Funds are Not Exempt from Claims of Creditors in Bankruptcy Cases On June 12, 2014, the United States Supreme Court ruled in the case of Clark v. Rameker that inherited individual retirement account (IRA) funds are not “retirement funds” for purposes of the exemption of certain assets from
Minnesota Levies Attorney
What is a Levy?
A levy is a legal action whereby a creditor seeks to enforce a judgment by seizing the debtor’s assets or property.
How do I Know Which Assets to Levy?
When a judgment has been docketed in a district court for at least thirty (30) days, and the judgment has not been satisfied, a creditor, upon request, is entitled to information as the nature, amount, identity, and locations of all the debtor’s assets, liabilities, and personal earnings pursuant to Minnesota Statutes section 550.011. The creditor may then obtain satisfaction of the judgment by way of execution on nonexempt assets and earnings of the debtor.
How Do I Enforce a Levy?
A levy is enforced by what is known as a “writ of execution.” A writ of execution is an order by the court directing a county sheriff to seize certain assets or earnings. The execution must contain the names of the parties, the amount of the judgment, and, if the judgment is for money, the amount actually due with accrued interest. The sheriff will then seize certain property, to be collected or sold, in an effort to satisfy the creditor’s judgment against the debtor.
Levy on Money
The most common asset used to satisfy an execution levy is money. Upon execution, a sheriff shall seize certain monies of the debtor and return those monies to the creditor as fulfillment of the judgment pursuant to section 550.09.
Levy on Property
Upon execution, all real and personal property, including rights and shares in the stock of corporations, money, book accounts, credits, negotiable instruments, and other evidences of indebtedness, may be levied and sold to satisfy a judgment on behalf of a creditor pursuant to section 550.10. Where the property to be seized cannot be immediately removed it is sufficient to file, in the appropriate filing office under the Uniform Commercial code, section 33.9-501, a certified copy of the execution pursuant to section 550.13.
Levy on Earnings
A creditor may recover a judgment by placing a levy against the debtor’s earnings. Unless the judgment is for child support, an individual’s earnings that are subject to an execution levy may not exceed the lesser of 25 percent of the debtor’s disposable income or forty (40) hours per week of federal minimum wages for the same pay period. Where a judgment is for child support, the creditor is entitled to substantially more under section 550.136, subdiv. 3(b).
The procedure for executing a levy on earnings is significantly more complicated than other writs of execution. First, a notice of the creditors intentions must be served upon the debtor no less than ten (10) days before service of the writ of execution on the employer. The notice must follow substantially the same format as the example provided in section 550.136, subdiv. 6, and must inform the debtor of potential earnings exemptions available to him/her under section 550.37, subdiv. 14.
If no statement of exemption is received within ten (10) days of the service of the original notice, the creditor may proceed with execution of the levy. At which point the creditor must provide to the sheriff an Earnings Disclosure form and Earnings Disclosure worksheet, along with the writ of execution, to be served upon the debtor’s employer. The disclosures must follow substantially the same format as the example provided in section 550.136, subdiv. 9. The creditor must then serve upon the debtor a copy of the writ of execution and all other papers served on the employer. The copies must be served by mail and within five (5) days after service is made upon the debtor’s employer.
Levy on Bank Account
A debtor’s bank account may also be subject to the execution of a levy provided the creditor follows the procedures outlined in section 550.143. The creditor must provide the sheriff with several documents, to be served upon the financial institution, which include:
- Execution Disclosure form pursuant to section 550.143, subdiv. 2;
- writ of execution; and
- Notice of Levy, instructions, and two (2) copies of an Exemption Notice pursuant to section 550.143, subdiv. 3.
If no claim of exemption is received by the financial institution within fourteen (14) days after the notices are mailed to the debtor, the funds remain subject to the execution levy and the institution must remit the funds to the sheriff within six (6) business days. If the debtor does claim an exemption, the creditor has the opportunity to object by mailing or delivering a Notice of Objection and Notice of Hearing to the financial institution and debtor pursuant to section 550.143, subdiv. 7.
Minnesota Department of Revenue Levies
When a debtor does not voluntarily pay a debt, enforced collection action is used by the Minnesota Department of Revenue in an attempt to collect the debt. A levy (also referred to as Levy and Distraint) is an administrative collection tool. It gives a collector with delegated authority the power to take property and the
Third Party Levy
Any financial obligation from a third party to the debtor can be levied. Instead of the third party paying the debtor, they send the payment to the Department of Revenue, and it is applied to the debtor’s unpaid debt. This is a one-time levy and requires the third party to send 100 percent of any
Levies on Securities in Minnesota
A levy on securities is a legal action used to take non-exempt publicly traded securities owned by the debtor. The Minnesota Department of Revenue uses the Third Party Levy on Securities letter to notify an investment company and the debtor. The letter also instructs the investment company and the debtor how to proceed once the
Minnesota Continuous Levy Attorney
A continuous levy requires that a third party send regular, periodic payments to the Minnesota Department of Revenue. When the debtor is a business, 100 percent of the funds owed to the debtor may be demanded from the third party. When the debtor is an individual, however, the levy is limited to 25 percent of
Minnesota Bank Levy Attorney
A bank levy is a legal action that takes property and rights to obtain property, including bank deposit accounts, of the person liable for a delinquent tax or other agency debt. When the Minnesota Department of Revenue mails a Notice of Levy to financial institutions, they are required to freeze the debtor’s funds on the
Minnesota Wage Levies
A wage levy, sometimes referred to as a garnishment, is a legal action used to take up to 25 percent of a debtor’s wages to pay a debt. The wage levy notice to an employer includes a disclosure form on which the employer calculates how much “additional withholding” will be taken from the debtor’s wages.
Minnesota Department of Revenue General Levy Guidelines
Collect tax debts first; then collect other agency debts in the order they were referred to the Department for collection. The Minnesota Department of Revenue's wage levy for any type of debt take precedence over a private garnishment after 70 days from service of the private garnishment to the employer. It does not take precedence
Property Subject to Levy in Minnesota
The chart shows common assets subject to various types of levies: Property Subject to Levy Type of Levy Used W-2 wages, commissions and bonuses Wage Levy 1099 non-employee compensation, periodic rents Continuous Levy Checking and savings accounts at banks and credit unions Bank Levy Rights and shares in the stock of corporations Investment Levy Annual
Types of Levies in Minnesota
Wage levies take a portion of a debtor’s wages. Bank Levies take a debtor’s bank assets such as funds in a checking account. Continuous Levies take all or a portion of a debtor’s payment for services (other than wages) performed for a third party on a continuous basis. Investment levies take a debtor’s assets in