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 your financial institution receives our levy, they hold funds from your account for 10 days before sending them to us.
The financial institution must return a questionnaire which includes:
The type of accounts and balances in each
Any of your property in their possession
Setoffs or adverse interest affecting the account balance
Who completed the questionnaire
If the debt is paid in full with secured funds before the bank levy funds are sent to us, we release our levy. The financial institution will release those funds back to you. They may charge you a fee for processing our levy.
We cannot stop a levy once it is issued. You should contact our office to arrange payment of any balance remaining after the levy.
Levy Setoffs and Adverse Interests
Levy setoffs and adverse interests may reduce the amount our levy can take.
Some funds may be exempt (protected) from a bank levy. (See Minnesota Statute 550.37). The levy notification we send you includes an Exemption Claim Form that lists the most common 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 types of assistance during the last six months, the time limit for exemption 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 by a secured payment
An adjustment reduced the amount you owe
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. Unsecured payments include personal checks, business checks, or credit card payments not entered by our revenue collection officers. These payments are not guaranteed to be honored by a financial institution.