2005 Minnesota Statutes

     551.05 Attorney's summary execution upon funds at a 
  financial institution. 

    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. 

    Subd. 1a.    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.  

    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: 

    

 STATE OF MINNESOTA                             DISTRICT COURT 
 County of ................         .........JUDICIAL DISTRICT 
 ................(Judgment Creditor)
 ................(Judgment Debtor) 
 TO:  Judgment Debtor                 EXEMPTION NOTICE 

    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).  

    Your account balance 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:  

    (1) nonexempt money can be turned over to the judgment 
 creditor or sheriff; 

    (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. 

    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.  

                                ............................. 
                                ............................. 
                                ............................. 
                                ............................. 
                                Name and address of (Attorney 
                                for) Judgment Creditor 

    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.  

          The exempt amount is $............  

    (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.  

                              .............................
                              DEBTOR

 DATED:  .............        .............................
                              .............................
                              .............................
                              DEBTOR ADDRESS
                              .............................
                              DEBTOR TELEPHONE NUMBER

    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:  

 STATE OF MINNESOTA                              DISTRICT COURT
 County of ...............          ..........JUDICIAL DISTRICT
 .................(Judgment Creditor)         OBJECTION TO
 .................(Judgment Debtor)           EXEMPTION CLAIM 
 .................(Garnishee) (Third Party)

    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. 

                                 .............................. 
                                 Attorney for Judgment Creditor 

    Subd. 6.    Request for hearing and notice for hearing.  
 The request for hearing accompanying the objection notice must 
 be in substantially the following form: 

 STATE OF MINNESOTA                           DISTRICT COURT
 County of ........               .........JUDICIAL DISTRICT
 ..................(Judgment Creditor)   REQUEST FOR HEARING
 ..................(Judgment Debtor)   AND NOTICE FOR HEARING
 ..................(Garnishee)(Third Party)

    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 
 .................................................................
 .................................................................

 Dated:  ...............                   .......................

                                           (JUDGMENT DEBTOR)
                                           .......................
                                           (ADDRESS) 
                                           .......................
 HEARING DATE:  ................    TIME:  ...................
 HEARING PLACE:  ...............

    (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.  

    HIST: 1990 c 606 art 2 s 5; 1991 c 199 art 1 s 81; 1992 c 464 
 art 1 s 56; 1993 c 156 s 9; 1994 c 488 s 8; 1999 c 107 s 66; 
 1999 c 159 s 144; 2000 c 343 s 4; 2000 c 405 s 13,14