Navigate Up
Sign In
Last Updated: 9/6/2017

Bank Levy

A bank levy is a legal action that allows us to take money from your bank or credit union account and apply it to your debt. Once the financial institution receives our levy, they freeze the funds in your account for 10 days before sending them to us. They must also send a Levy Questionnaire that identifies:

  • the type of accounts and balances in each 
  • any property you own that is in their possession
  • setoffs or adverse interest affecting the account balance
  • who completed the questionnaire

Levy Setoffs and Adverse Interests

Levy setoffs and adverse interest may reduce the amount our levy can take.

  • A setoff occurs when your financial institution uses the funds in your account to pay outstanding loans, including those held as collateral for a loan. They must submit proof the "right of setoff" was done prior to receiving our levy. (See Minnesota Statutes, section 270C.67.)
  • Adverse interests are claims by creditors against your earnings or a third party who has a right to your assets. To prove their claim, the financial institution must provide the details and which assets are included.

Exemption Claims

You may have a right to claim exemption from our bank levy. (See Minnesota Statute 550.37.)  The levy notification we send you includes an Exemption Claim Form that lists the most common, but not all, types of bank levy exemptions. You must provide proof of exemption by sending us:

  • your bank statement showing the levied amount and the source of all deposits that add up to that amount
  • all paystubs that match the deposits included in the levy, if the funds are wages

Some funds are exempt from our levy for 20 or 60 days after deposit. Generally, 75% of wages are exempt for 20 days after deposit. If you were incarcerated or received financial or other type of assistance during the last six months, the time limit increases to 60 days after deposit.

Note: You have nine months from the date of the levy to claim exemption and request a refund. We only consider the funds already deposited in your account at the time of the levy.

Levy Reduction or Release

We may reduce or release a levy when:

  • the funds affected by the levy are exempt
  • your debt balance is reduced due to a secured payment
  • an adjustment reduced the amount owing
  • we issued multiple levies and one financial institution is holding funds
Note: There is a wait time for a levy reduction when an unsecured payment applies to your debt.