ENFORCEMENT OF SUPPORT OBLIGATION
CS 806P-1 Notice of Lien-Levy, Financial Institutions - Procedures: Issuing a Lien-Levy
1. Determine if a lien-levy action is appropriate. An NCP must owe arrears before a lien-levy action may be initiated; however, current support due for the month the levy is initiated may be included in the levy.
2. Matching with financial institutions. Determine if the NCP has financial holdings in a financial institution.
3. Obtain information about the NCP’s financial holdings. If necessary, verify the NCP’s assets held in a financial institution by sending a “Financial Information Request” to the NCP’s bank, credit union, or other depository institution (e.g., savings and loan, or mutual funds institution) or depository institution-affiliated party (e.g., services provided by a financial data service). The letter asks the financial institution to release specific information about the account, including the legal account name, names of joint-owners, types of accounts, and balances.
Verify that the individual you are investigating is in fact the NCP on
the case. Match the name, social
security number and address (if known).
NOTE: If the NCP is receiving financial assistance and you discover a financial account belonging to the NCP, notify DWS of this information.
If the financial institution does not comply with your request for information, you may generate a “Subpoena Duces Tecum” and the accompanying affidavit to be signed by your manager. The financial institution may charge a research fee for production costs associated with the subpoena. Serve the subpoena on the financial institution by sheriff, constable, or a CSS process server.
If the financial institution refuses to honor the subpoena, it may be penalized, as follows:
a. $25 for each failure to provide requested information; or,
b. $500 if the failure to provide requested information is the result of a conspiracy between the entity and the NCP to not supply the information or to supply false or incomplete information.
Consult with your manager and the
Attorney General’s Office about whether to pursue a penalty against the
financial institution when it fails to honor a subpoena.
4. Determine if the account is subject to lien-levy. The NCP must be able to immediately access the account in order for the account to be subject to lien-levy. You may initiate a lien-levy action if the account is one of the following types:
a. savings accounts;
b. checking accounts (by exception, see below);
c. money market accounts;
d. certificates of deposit;
e. Individual Retirement Accounts (IRA’s);
f. qualified or non-qualified retirement or pension plan accounts;
g. Keogh Plan accounts;
h. employee welfare benefit plan accounts;
i. payroll accounts;
j. uncollected bank deposits;
k. mutual funds;
m. some trust accounts (see below); and,
n. other amounts generated by brokers, brokerage firms, or investment companies (such as interest or royalties).
Securities, such as stocks or
bonds, are also subject to lien-levy.
The broker or financial institution should liquidate the stock or bond,
or any other type of funds that are not in cash or other form of liquid asset,
into cash for CSS in the same manner they would have for the NCP, or surrender
the asset to CSS in a form that can be converted into cash (e.g., stock
Contents of safety deposit boxes are also subject to lien-levy. Consult with your manager and ARD or RD before levying the contents of a safety deposit box as the contents may need to be sold at sheriff’s auction if the NCP does not pay off the debt.
In some instances a lien-levy action, such as a levy on a Certificate of Deposit (CD) account, will result in a penalty or interest charge due to the early withdrawal of those funds. The NCP is responsible for paying these charges to the financial institution.
NOTE: If the account contains only the minimum balance required by the institution to keep the account open (e.g. many credit unions require $50 in shares to maintain an account), do not levy on the minimum balance.
The preceding accounts are subject to the CSS lien-levy authority whether the account is held individually in the name of the NCP, or the account is held jointly in the name of the NCP and an unobligated joint-owner (or joint-owners), such as a current spouse.
b. Some trust accounts. Before initiating a lien-levy action on any trust account, determine whether the NCP has access to the account and if the funds belong to the NCP. If the NCP receives a regular pay-out or can draw from the account, you may levy the account. If the money is not available to the NCP, e.g., the NCP does not have access to the money until his 40th birthday, do not levy the account. Also, if you know that the NCP is a court appointed conservator over funds that belong to another person, do not levy the account, e.g., the NCP is handling the financial affairs of a parent who is in a nursing home. Obtain your manager’s approval before initiating a lien-levy action on a trust account.
c. Checking accounts. A checking account must contain at least $1,000 before it is subject to lien-levy, and you may only levy on any amounts in excess of $1,000 in a checking account. For example, if the account contains $1,500.00, you may do a lien-levy for $500.00. If a balance has not been provided, you must verify the amount in the account before issuing a lien-levy. Your manager and your RD or ARD must authorize a lien-levy against a checking account before you send the NLLC form. Your manager must also sign the form.
d. Business Accounts. If you find that a NCP has only a business account (no personal
account) and uses the business account for personal expenses, you may be able to treat the business
account as a personal account for child support purposes. This stance remains untested in
5. Generate and Send the Notice of Lien-Levy and the Concurrent Notice to Non-custodial parent by taking the steps listed below.
a. Determine the type of Lien Levy to generate. Select the “Notice of Lien-Levy, Savings Account” when you want to attach the NCP’s savings type accounts, or select the “Notice of Lien-Levy, Checking Account” when you want to attach the NCP’s checking account.
b. Add or update the financial institution to ORSIS.
c. Generate the appropriate lien-levy forms packet.
d. Send the lien-levy packet. Send the NLLS or NLLC packet by regular first-class mail to the branch office where the account is located, unless instructed by the financial institution to send the notice to another location. If you know the contact name for the financial institution, send or hand deliver the notice to that person’s attention (delivery methods may vary by region, check with your manager, ARD or RD). You may FAX the notice in addition to mailing it. You may also serve the packet by constable on an emergency basis and with the approval of your manager.
NCP. Send a copy of the Notice of
Lien-Levy to the NCP by regular first-class mail at his/her last known
residential address on the same day you send the notice to the financial
NOTE: If the account does not contain sufficient funds to pay the past-due support amount in full, and you later identify other financial account(s) belonging to the NCP, generate and send a new Notice of Lien-Levy packet, including a new N60A.
f. Document your actions. Write a narrative at the case level to document your actions, including justification for levying a checking account.
6. Automatic Hold on REX Transaction. When the lien-levy “REX” payment is received and posted, ORSIS will automatically place a “hold” on the payment. The hold allows time for the NCP and/or co-owner on a joint account to contest the lien-levy action. ORSIS looks at all the financial institution records for the participant. If the ownership code is “sole” on all financial institutions, a 30-day hold will be set for disbursement. If the ownership code on any financial institution is “joint”, or is not transmitted, a 90-day hold will be set for disbursement. ORSIS will release the hold after the 30 or 90 days have passed. If you want the hold released before the 30 or 90 days have passed (e.g., all issues have been resolved from the review process), the senior agent, manager, ARD, or RD can release the hold. After the hold is released the money will post and distribute according to distribution rules.