ENFORCEMENT OF SUPPORT OBLIGATION

CS 806 Notice of Lien-Levy, Financial Institutions – Overview

02/98 Revised 05/27/16 Training Completed 06/10/16

45 U.S.C. 666 (a)(17); 31 CFR 212; U.C.A. 62A-11-103(5)&(14), 104, 304.1, 304.5(1)(b), 312.5, 313, 78B-12-112, 78B-14-507; UCRP 45; R527-10, R527-430

 

 

Statutory Authority

 

Utah Code Annotated (UCA) 62A-11-304.1 states:

  “(1) The office may, without the necessity of initiating an adjudicative proceeding or obtaining an order from any other judicial or administrative tribunal, take the following actions related to the establishment of paternity or the establishment, modification, or enforcement of a support order, and to recognize and enforce the authority of state agencies of other states to take the following actions:
. . .(b) subpoena financial or other information needed to establish, modify, or enforce a support order, including:
. . .(ii) information held by financial institutions on such things as the assets and liabilities of a person who owes or is owed support;
. . .(h) secure assets to satisfy past-due support by:
. . .(ii) attaching and seizing assets of an obligor held in financial institutions;
. . .(2) (a) When taking action under Subsection (1), the office shall send notice under this Subsection (2)(a) to the person or entity who is required to comply with the action if not a party to a case receiving IV-D services. The notice shall include:
     (i) the authority of the office to take the action;
     (ii) the response required by the recipient;
     (iii) the opportunity to provide clarifying information to the office under Subsection (2)(b);
     (iv) the name and telephone number of a person in the office who can respond to inquiries; and
     (v) the protection from criminal and civil liability extended under Subsection (7).
     (b) The recipient of a notice sent under Subsection (2)(a) shall promptly comply with the terms of the notice and may, if the recipient believes the office's request is in error, send clarifying information to the office setting forth the basis for the recipient's belief.
. . .(4) The office may impose a penalty against an entity for failing to provide information requested in a subpoena issued under Subsection (1) 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 obligor to not supply the requested information or to supply false or incomplete information.
     (5) (a) Unless a court or administrative agency has reduced past-due support to a sum certain judgment, the office shall provide concurrent notice to an obligor in accordance with Section 62A-11-304.4 of:
     (i) any action taken pursuant to Subsections (1)(h)(i)(B), (l)(h)(ii), (1)(h)(iii), or Subsection 62A-11-304.5(1)(b) if Subsection (5)(b)(iii) does not apply; and
     (ii) the opportunity of the obligor to contest the action and the amount claimed to be past-due by filing a written request for an adjudicative proceeding with the office within 15 days of notice being sent.
     (b) (i) Upon receipt of a notice of levy from the office for an action taken pursuant to Subsections (1)(h)(i)(B), (1)(h)(ii), (1)(h)(iii), or Subsection 62A-11-304.5(1)(b), a person in possession of personal property of the obligor shall:
     (A) secure the property from unauthorized transfer or disposition as required by Section 62A-11-313; and
     (B) surrender the property to the office after 21 days of receiving the notice unless the office has notified the person to release all or part of the property to the obligor.
     (ii) Unless released by the office, a notice of levy upon personal property shall be:
     (A) valid for 60 days; and
     (B) effective against any additional property which the obligor may deposit or transfer into the possession of the person up to the amount of the levy.
     (iii) If the property upon which the office imposes a levy is insufficient to satisfy the specified amount of past-due support and the obligor fails to contest that amount under Subsection (5)(a)(ii), the office may proceed under Subsections (1)(h)(i)(B), (1)(h)(ii), (1)(h)(iii), or Subsection 62A-11-304.5(1)(b) against additional property of the obligor until the amount specified and the reasonable costs of collection are fully paid.
     (c) Except as provided in Subsection (5)(b)(iii), the office may not disburse funds resulting from action requiring notice under Subsection (5)(a)(i) until:
     (i) 21 days after notice was sent to the obligor; and
     (ii) the obligor, if he contests the action under Subsection (5)(a)(ii), has exhausted his administrative remedies and, if appealed to a district court, the district court has rendered a final decision.
     (d) Before intercepting or seizing any periodic or lump-sum payment under Subsection (1)(h)(i)(A), the office shall:
     (i) comply with Subsection 59-10-529(2)(a); and
     (ii) include in the notice required by Subsection 59-10-529(2)(a) reference to Subsection (1)(h)(i)(A).
     (e) If Subsection (5)(a) or (5)(d) does not apply, an action against the real or personal property of the obligor shall be in accordance with Section 62A-11-312.5.
     (6) All information received under this section is subject to Title 63, Chapter 2, Government Records Access and Management Act.
     (7) No employer, financial institution, public utility, cable company, insurance organization, its agent or employee, or related entity may be civilly or criminally liable for providing information to the office or taking any other action requested by the office pursuant to this section.
     (8) The actions the office may take under Subsection (1) are in addition to the actions the office may take pursuant to Part 4, Income Withholding in IV-D Cases.”

 

UCA 62A-11-304.5 states:
     “(1) The office shall enter into agreements with financial institutions doing business in the state:
     (a) to develop and operate, in coordination with such financial institutions, a data match system that:
     (i) uses automated data exchanges to the maximum extent feasible; and
     (ii) requires a financial institution each calendar quarter to provide the name, record address, social security number, other taxpayer identification number, or other identifying information for each obligor who:
     (A) maintains an account at the institution; and
     (B) owes past-due support as identified by the office by name and social security number or other taxpayer identification number; and
     (b) to require a financial institution upon receipt of a notice of lien to encumber or surrender assets held by the institution on behalf of an obligor who is subject to a child support lien in accordance with Section 62A-11-304.1.
     (2) The office may pay a reasonable fee to a financial institution for compliance with Subsection (1)(a), which may not exceed the actual costs incurred.
     (3) A financial institution may not be liable under any federal or state law to any person for any disclosure of information or action taken in good faith under Subsection (1).
     (4) The office may disclose a financial record obtained from a financial institution under this section only for the purpose of, and to the extent necessary in, establishing, modifying, or enforcing a child support obligation.
     (5) If an employee of the office knowingly, or by reason of negligence, discloses a financial record of an individual in violation of Subsection (4), the individual may bring a civil action for damages in a district court of the United States as provided for in the Social Security Act, 42 U.S.C. Sec. 669A.
     (6) The office shall provide notice and disburse funds seized or encumbered under this section in accordance with Section 62A-11-304.1.”

UCA 62A-11-313 states:
     “(1) After receiving notice that a support lien has been filed under this part by the office, no person in possession of any property which may be subject to that lien may pay over, release, sell, transfer, encumber, or convey that property to any person other than the office, unless he first receives:
     (a) a release or waiver thereof from the office; or
     (b) a court order that orders release of the lien on the basis that the debt does not exist or has been satisfied.
     (2) Whenever any such person has in his possession earnings, deposits, accounts, or balances in excess of $100 over the amount of the debt claimed by the office, that person may, without liability under this part, release that excess to the obligor.”

 

The Office of Recovery Services/Child Support Services (ORS/CSS) is authorized by UCA 62A-11-304.1 to impose liens and levy (attach and seize) upon money and property held in financial institutions to satisfy past-due child support obligations that are recorded on the Utah State Case Registry (ORSIS computer system).  CSS is authorized to levy upon the money even if the non-custodial parent (NCP) is making regular current and/or arrears support payments.  Generally, CSS will only levy upon savings and other types of savings depository accounts, such as retirement accounts and mutual funds.

 

An NCP must owe an arrears debt before CSS may initiate a lien-levy action.  When the lien-levy money is received by CSS, ORSIS will automatically distribute it according to distribution rules.  Current support will be met first if it has not already been met by income withholding or another payment type (other than federal tax).  After current support is met ORSIS will distribute the money to the arrears debt(s). 

 

Under Federal law 42 U.S.C. 666(a)(17), CSS is required to implement and maintain a data match system with financial institutions for locating the assets of child support debtors.  CSS conducts data matching with various in-state and out-of-state financial institutions.  The agent will make a determination whether to levy the NCP’s financial assets based upon the criteria listed in this policy.

 

To levy upon a NCP’s financial assets, CSS sends a “Notice of Lien-Levy” to the financial institution, such as a bank or credit union. The financial institution is required to freeze the account and send the money to CSS after 21 calendar days unless it receives a release from CSS or from a court.  CSS may release all or part of the funds if the lien-levy action has been contested and a determination has been made that some or all of the funds are exempt from levy.

 

Definitions

 

1.                   Lien: A lien establishes a legal claim against property.

 

2.                   Levy: to impose or collect by legal authority.

 

3.                   Lien-levy: an administrative action to seize and attach financial assets to satisfy a past-due support obligation.

 

4.                   Financial Institution: includes any national bank, State bank, District bank, trust company and any Federal branch and insured branch, any Federal and State savings associations, any Federal and State credit union including an institution-affiliated party of such credit union, and any benefit association, insurance company, safe deposit company, money-market mutual fund, securities broker or similar entity authorized to do business in any of the 50 states and U.S. territories.

 

5.                   Real property: Land, buildings, and improvements attached thereto, such as houses, commercial buildings, fencing, storage sheds, etc.

 

6.                   Personal property:

a.                   Tangible property such as vehicles, jewelry, tools, portable equipment, etc.

b.                  Liquid, cash, or “paper” assets such as a checking or savings accounts, tax refunds, insurance settlements, stocks, bonds, etc.

 

 

Forms Overview

 

1.                   Financial Information Request.  Sent to financial institutions to obtain information about the NCP’s assets and liabilities.

 

2.                   Concurrent Notice to Obligor of Lien-Levy.  Sent to the NCP and current spouse with a copy of the Notice of Lien-Levy for notification of the levy action.

 

3.                   Notice of Right to Garnish Federal Benefits.  This is a sub-form that is sent with all Notices of Lien-Levy.  The form notifies financial institutions that a lien-levy action is not subject to the identification and protections of Federal benefit deposit requirements found pursuant to 31 CFR Part 212.

 

4.                   Notice of Lien-Levy, Checking Account.  Sent to financial institutions only when the NCP has in excess of $1,000.00 in a checking account, and after review by the team manager and agent.  The team manager and Regional Director (RD) or Associate Regional Director (ARD) must authorize the use of this form and the manager must sign the form.

 

5.                   Notice of Partial Release of Funds.  Sent to the financial institutions to release part of the funds in account.  This does not release the lien-levy action.

 

6.                   Notice of Full Release of Lien-Levy.  Sent to the financial institution to release all of the funds in the account.  This also releases the lien-levy action.

 

7.                   Notice of Lien-Levy, Savings Account.  Sent to financial institutions to levy upon savings type accounts.  Checking or other negotiable withdrawal funds are not included in this form.

 

8.                   Child Support Enforcement Transmittal #3 – Request for Assistance/Discovery.  UIFSA form that may be used to request a state other than Utah execute a lien-levy on a financial institution in that state for Utah.  This is a limited enforcement request form.

 

9.                   URAL – Written Request for Review, Notice of Lien-Levy.  Sent to the NCP with the concurrent notice and a copy of the Notice of Lien-Levy.  This form is used by the NCP, or NCP’s spouse, or other joint-owner on the account to request a review.

 

10.               Results of Agent Review Letter.  Sent to the NCP’s spouse or the other joint-owner as notification of the results of the senior agent or the QA review when the lien-levy action has been contested by the spouse or joint-owner, and a review has been conducted.

 

11.               Review Response Intergovernmental:  Lien-Levy Only.  Sent to the NCP on an incoming intergovernmental lien-levy only case as notification of the results of the administrative review when the lien-levy action has been contested, and the Central Registry Unit (CRU) has conducted the administrative review.  This letter may also be used to notify the NCP that ORS is unable to conduct an adjudicative proceeding on an incoming intergovernmental lien-levy only case. 

 

12.               XNUR – Administrative Review Response:  Past-Due Support and/or Lien-Levy.  Sent to the NCP as notification of the results of the administrative review when the lien-levy action has been contested and a review has been conducted. 

 

 

Overview of Lien-Levy Timelines

 

1.                   Financial Institutions: The Notice of Lien-Levy form is sent to the financial institution.  The financial institution must immediately secure the account.  After 21 calendar days from the receipt of the notice, the financial institution must surrender the money or property in the account, up to the amount of past-due support listed on the notice, to CSS unless CSS or a court has released all or part of the money.

The financial institution must continue to secure and surrender additional funds that are deposited into the account for 60 calendar days from the date it received the notice up to the amount of past-due support listed on the notice, unless CSS notifies the financial institution that the Notice of Lien-Levy has been released.

Legal cite: UCA 62A-11-304.1(5)(b)(i) and (ii)

 

2.                   Review Process: The “Concurrent Notice to Obligor” is sent to the NCP and his/her current spouse at the same time the lien-levy form is sent to the financial institution.  The NCP generally has 15 calendar days from the date of the notice to request an administrative or adjudicative review.  Joint-owners may only request an agent review.  Joint-owners who do not live with the NCP may be allowed longer than 15 calendar days to request a review when necessary.

 

NOTE:  A review may be requested on an incoming intergovernmental lien-levy only case.  Because a full services case is not opened for these types of actions, review requests are worked by the Central Registry Unit (CRU), located in the Salt Lake Office.  CRU is only responsible for conducting an administrative review, when requested on these types of actions (incoming intergovernmental lien-levy only cases).  It is not appropriate to conduct an adjudicative proceeding, because the case is not a full service case and ORS would not have access to all of the orders, payment histories, etc. 

a.                   NCP contests the amount of past-support listed on the Notice of Lien-levy and/or the lien-levy action. 

b.                  Joint-owner requests review of lien-levy action.  The joint-owner may only contest the lien-levy action.

i.                     If a review is requested, the senior agent conducts an immediate review and sends the “Results of Review” to the joint-owner.  The joint-owner has 5 business days from the date of the senior agent appeal to the QA.

ii.                   If requested, the QA conducts an immediate review and sends the QA “Results of Review” letter to the joint-owner.  The joint-owner may contest by taking the matter to court.  The joint-owner has 15 calendar days to present proof that s/he has appealed to court.

iii.                  The matter may also be taken to court at any time during the process.

 

 

Lien-Levy Types

 

1.                   Notice of Lien-Levy, Savings Account.  Initiate this action when you want to attach the NCP’s savings type account.  Savings account types include:  all savings deposit accounts; time deposit accounts; or money-market mutual funds accounts.  Savings account types also include:  Individual Retirement Accounts (IRA); retirement plans benefiting self-employed individuals; or any other qualified plans in possession or control of the financial institution.

 

2.                   Notice of Lien-Levy, Checking Account. Initiate this action when you want to attach the NCP’s checking account. A checking account must contain more than $1,000.00 before it is subject to lien-levy, and then you may levy only on the amount in excess of $1,000 that is reserved to prevent the NCP’s checks from bouncing.  If a balance has not been provided, you must verify the amount in the account before issuing a lien-levy.  Your manager plus your RD or ARD must authorize the use of this action.  Your manager must also sign the form. 

NOTE:  In rare instances you may lien-levy both savings and checking accounts at the same time.  The criteria for levying the checking account must apply.  Consult with your management chain (Manager, ARD, RD, and CSS Director) if you believe it is appropriate to initiate both actions simultaneously.