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Minnesota Legislature

Office of the Revisor of 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.
History: 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