Current through September 24, 2024
(1) In cases where there is an arrearage of
child or spousal support in a Title IV-D child support case or in which a lien
arises pursuant to T.C.A. §
36-5-901, the Department may,
without further order of a court, secure the assets of the obligor to satisfy
the current obligation and the arrearage by:
(a) Intercepting or seizing periodic or
lump-sum payments or benefits due the obligor:
1. From a state or local agency;
2. From judgments of any judicial or
administrative tribunal, settlements approved by any judicial or administrative
tribunal, and lottery winnings;
(b) Attaching or seizing assets of the
obligor or the assets in which the obligor has an interest that are in the
possession of any other person or entity, or that are held in any financial
institution as defined in 1240-2-5-.02;
(c) Attaching public and private retirement
funds; and
(d) Imposing liens in
accordance with this Chapter and §
36-5-901 et seq. and, in
appropriate cases by forcing the sale of the obligor's legal or equitable
interest in the property and distributing the proceeds of such sale.
(2) Enforcement of Lien.
(a) The Department may enforce the provisions
of Rule 1240-2-5-.03 and T.C.A. §
36-5-901 et seq. by issuance of an
administrative order to any person or entity directing the seizure, encumbrance
or sale of any assets of an obligor.
(b) The order shall direct the person or
entity to hold or encumber, subject to any due process procedures provided to
the obligor, all assets of any kind of the obligor who is subject to the order,
pending the outcome of the administrative due process procedures provided by
this Chapter.
(c) The order shall
be based upon and issued pursuant to an existing judicial or administrative
order, which has previously established support under which an arrearage, due
to overdue support, as defined in T.C.A. §
36-5-901, has occurred.
(3) The administrative order for
seizure or sale of assets may be issued upon determination by the Department,
as shown by records of the support obligation, that arrears involving the
obligor's support obligations exist.
(4) Notice to the Obligor.
(a) There shall be no requirement of advance
judicial or administrative notice or hearing prior to the seizure or
encumbrance of the obligor's property by administrative order, but the
Department will not permit the final disposition of any property seized or
encumbered under the lien enforcement procedures until the exhaustion of
administrative and judicial remedies as provided in this Chapter at 1240-2-5.
.13.
(b) Process and Form of Notice
.
1. A notice to the obligor against whom the
administrative order for seizure or sale of assets is directed shall be sent by
mail to the last address of record possessed by the Department as shown on
TCSES.
2. The notice shall be sent
within five (5) days of the issuance of the administrative seizure
order.
3. The notice shall inform
the obligor of the fact that the obligor's assets have been the subject of an
administrative order and that they have been seized or are subject to sale and
are being held, may be conveyed to the Department or may be sold, subject to
the right to an administrative hearing to contest the seizure or sale of such
assets.
4. The notice shall specify
the sum demanded and shall contain, in the case of personal property, an
account of the property actually seized and, in the case of real property, a
description with reasonable certainty of the property seized. In the case of
assets in a financial institution, it shall be sufficient to notify the obligor
of the seizure of any assets of the obligor that may be held by any institution
to which the order is directed.
(5) All administrative orders for seizure or
sale shall be subject to and subordinate to:
(a) Any order or automatic stay by the United
States Bankruptcy Court affecting an asset of the obligor;
(b) An attachment or execution under any
judicial process in effect at the time of the administrative seizure order,
pending modification of such court's orders;
(c) A priority under Rule 1240-2-5-.05;
or
(d) A claim for reasonable
attorneys fees, subject to the limitations on such fees by the rules of the
Tennessee Supreme Court, whether evidenced by a court order, a statutory
provision, or a contract.
(6) An administrative order for the seizure
of pension and retirement funds shall comply with the provisions for a
qualified domestic relations order pursuant to 29 USC §1056(d), if
applicable.
(7) If the assets of
the obligor are known by the person or entity which received such
administrative order to be subject to any orders of the United States
Bankruptcy Court, or to any attachment, execution or existing lien, that person
or entity shall notify the Department at the address contained in the order
within ten (10) days after receipt of the administrative order. With respect to
deposit accounts of the obligor, the depository financial institution shall
inform the Department of the unencumbered balances of such accounts.
(8) Method of Issuance of Administrative
Order of Seizure or Sale.
(a) Form of Issuance
and Effectiveness.
1. The order may be issued,
and shall be effective, if issued to the holder of property or to the person or
entity in possession of, or obligated with respect to property, or rights to,
property of the obligor.
2. The
order may be issued electronically or magnetically, or manually by a paper
document approved by the Department.
3. The administrative order of seizure may
also be issued, and shall be effective, if issued to the holder of the property
of the obligor or to the person or entity in possession of, or obligated with
respect to property or rights to, property of the obligor, if the order is
transmitted electronically or magnetically by use of any computer data match
process that is based upon any information available to the Department showing
that the person whose property is to be seized or encumbered is a child support
obligor owing overdue support as defined in this Chapter.
4. The order shall be based upon any
information showing to the Department or its contractors or other agents that
the person whose property is to be seized is an obligor owing overdue support
as defined in this Chapter.
(b) Seizure Orders for Less Than the Full
Amount.
1. When an administrative order is
issued by the Department pursuant to any provisions of law or regulations or
pursuant to agreements entered pursuant to T.C.A. §
45-19-101(a) or
(b) directing the encumbrance, escrow,
seizure or surrender of assets of an obligor consisting of a demand deposit
account, or an account accessible by a check or negotiable order of withdrawal
for the purpose of satisfying a lien for past-due child support, the Department
may direct that only a portion of such accounts, up to the amount necessary to
satisfy the existing lien for past-due child support, be encumbered, escrowed,
seized or surrendered.
2. If less
than the whole amount of the account is sought, the Department's order shall
direct the financial institution to withhold a specific percentage or a
specific dollar amount of those types of accounts.
(9) To satisfy overdue support, an
order of seizure or sale may be issued to the obligor if the obligor is in
physical possession of property sought to be sold, and the order shall direct
that the obligor hold property subject to the provisions of this
Chapter.
(10) Duty of Recipient of
Administrative Order of Seizure.
(a) Upon
receipt of the administrative order of seizure, whether received
electronically, magnetically or otherwise, the person or entity which has
possession of the assets of the obligor shall immediately seize, hold, and
encumber such assets, as directed by the Department, pending further direction
from the Department as to the disposition of the assets or pending any further
orders of any court of competent jurisdiction.
(b) The person or entity must secure in an
escrow account for such purpose, or by such other reasonable means, such assets
of the obligor in its possession, and must take any other steps deemed
reasonable to preserve any real or personal property.
(c) Upon receipt of directions from the
Department that all due process procedures have been completed or were waived
in any manner, and subject to the provisions of paragraph (5) and subject to
the priority for the Department's liens as described in Rule 1240-2-5-.05, the
person or entity to whom or to which the order was directed shall pay or
deliver to the Department, pursuant to its direction, the assets of the obligor
that are held or that come into the possession or control of the person or
entity and that are necessary to comply with the terms of the Department's
administrative order.
(11) Sale of property that has been seized
from an obligor in physical or constructive possession of the property may
proceed following exhaustion of administrative or judicial processes provided
in this Chapter, applicable provisions of T.C.A. §
36-5-1001 et seq. and the
procedures for sale provided by these rules.
(12) Pursuant to T.C.A. §
36-5-905(g), all
persons or entities complying with any administrative order issued pursuant to
this section shall be absolutely immune from any liability, civil or criminal,
for compliance with the terms of such order or attempted compliance in good
faith with such order.
Authority: T.C.A. §§
4-5-202; 36-5-901 et seq.;
36-5-912; 45-19-101; 42 USC § 654a(h), and 42 USC § 666(a)(14),
(17)(C) .
