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IC 28-9-3
Chapter 3. Notice of Adverse Claims
IC 28-9-3-1
Duty of depository financial institution upon notice of adverse
claim
Sec. 1. Except upon the conditions specified in sections 3 and 4
of this chapter, notice to a depository financial institution of an
adverse claim does not require the depository financial institution to:
(1) recognize the adverse claim in any manner; or
(2) place a hold on, or otherwise restrict withdrawal of funds
from, a deposit account.
As added by P.L.258-1989, SEC.2.
IC 28-9-3-2
Honoring order or instructions of depositor; liability
Sec. 2. Except as provided in sections 3 and 4 of this chapter, and
notwithstanding IC 34-25-3-3 or any other rule or doctrine of law
that:
(1) would cause a depository financial institution to be
accountable to an adverse claimant for any portion of any
deposit account; or
(2) would create or impose in favor of an adverse claimant a
lien, charge, encumbrance, or other right with respect to a
deposit account;
a depository financial institution may, without being liable in
damages to any person, honor the order or instructions of a depositor
or an agent of a depositor who is authorized under records
maintained by the depository financial institution to control the
depositor's deposit account.
As added by P.L.258-1989, SEC.2. Amended by P.L.1-1998,
SEC.156.
IC 28-9-3-3
Adverse claim by one who is not a money judgment creditor of a
depositor; accountability of depository financial institution; actions
required of adverse claimant
Sec. 3. (a) This section applies to an adverse claimant who is not
a money judgment creditor of a depositor.
(b) A depository financial institution may not be held accountable
to an adverse claimant for funds in a deposit account that are claimed
by the adverse claimant unless the adverse claimant:
(1) serves on the depository financial institution written verified
notice of the adverse claim stating in detail:
(A) the nature of the adverse claim, including the facts from
which the adverse claim arose;
(B) that an action has been instituted in a court having
jurisdiction in Indiana, or will be instituted within three (3)
working days after receipt by the depository financial
institution of the notice; and
(C) that the action instituted will include all persons known
by the adverse claimant to have a claim against or an interest
in the deposit account;
(2) serves on the depository financial institution notice of an
adverse claim with a restraining order, an injunction, or another
legal process that:
(A) directs the depository financial institution to place a hold
on or otherwise restrict withdrawals from a deposit account;
(B) is issued or appears to be issued by a court having
jurisdiction as a result of an action in which the depositor,
the depository financial institution, and all persons who are
known to the depository financial institution as having an
interest in the deposit account are parties; and
(C) is accompanied by a court order providing for the
recovery and collection by the depository financial
institution of all costs and expenses, including attorney's
fees, that have been or may be incurred by the depository
financial institution as a result of the action; or
(3) furnishes to the depository financial institution, in form and
with sureties acceptable to the depository financial institution,
a bond indemnifying the depository financial institution from
payment of damages, costs and expenses, and attorney's fees
incurred by the depository financial institution as a result of the:
(A) payment by the depository financial institution of the
adverse claim;
(B) dishonor by the depository financial institution of any
instructions from, or orders by, a depositor; or
(C) dishonor by the depository financial institution of other
duties imposed upon the depository financial institution by
contract or law.
As added by P.L.258-1989, SEC.2.
IC 28-9-3-4
Adverse claim by money judgment creditor attempting to garnish
deposit account; accountability of depository institution;
interrogatories; actions required of adverse claimant
Sec. 4. (a) This section applies to an adverse claimant who is a
money judgment creditor attempting to garnish a deposit account.
(b) A depository financial institution may not be held accountable
to an adverse claimant for funds in a deposit account that are claimed
by the adverse claimant unless the adverse claimant has complied
with subsection (d).
(c) A depository institution is not required to respond to
interrogatories regarding deposit accounts at the depository financial
institution unless the adverse claimant has complied with subsection
(d).
(d) An adverse claimant shall do all of the following:
(1) Provide the depository financial institution notice of
garnishment proceedings, the unpaid amount of the judgment,
and sufficient identifying information about the judgment
defendant to enable the depository financial institution
reasonably to verify the judgment defendant as the depositor.
(2) Serve or cause to be served upon the depository financial
institution an order to answer interrogatories.
(3) If the judgment defendant is an individual, serve or cause to
be served upon the depository financial institution a copy of a
notice, or an apparently valid order containing a notice, issued
by a court that is directed to the judgment defendant (which is
to be used by the depository financial institution to comply with
IC 28-9-4-2(a)(3)) and that:
(A) states that the adverse claimant has or may have served
or caused to be served upon one (1) or more depository
financial institutions notice that may result in the placing of
a hold on deposit accounts maintained by the judgment
defendant, either individually or jointly with another person,
in such depository financial institutions;
(B) states that under federal and state law certain funds are
exempt from garnishment, including Social Security,
Supplemental Security Income, veterans benefits, and certain
disability pension benefits, and that there may be other
exemptions from garnishment under federal or state law;
(C) states that if the judgment defendant or another person
who maintains a deposit account jointly with the judgment
defendant believes that some or all of the funds in the
deposit account on which a hold may have been placed are
exempt, such person is entitled to a prompt hearing for the
purpose of presenting evidence to establish exemptions and
seeking removal of the hold; and
(D) has attached to it a preprinted detachable form that may
be used by the judgment defendant or other person
maintaining a deposit account jointly with the judgment
defendant in requesting the prompt hearing specified in
clause (C) and that generally instructs such person as to how
the form should be used in requesting this hearing.
(4) Serve or cause to be served upon the depository financial
institution an apparently valid order issued by a court that
expressly directs the depository financial institution to place a
hold on a deposit account identified in the order whenever the
conditions under subdivisions (1) through (3) are met.
(5) Pay to the depository financial institution five dollars ($5)
for each judgment defendant identified by the adverse claimant
under subdivision (1). This fee may not be assessed as a cost to
the judgment defendant in the action.
(e) An order issued under subsection (d)(4):
(1) is subject to the limitations under IC 28-9-4-2 concerning
the duration of the restriction and the amount to be restricted;
and
(2) may be terminated or modified to reflect valid exemptions
of a depositor that the court has considered.
(f) A depository financial institution is not required to pay funds
in a deposit account to an adverse claimant unless the adverse
claimant serves the depository financial institution with a final order
in garnishment directing the payment of the lesser of:
(1) the unpaid amount of the judgment specified by the
documents and process; or
(2) the balance in the account at the time of receipt of the
documents and process.
As added by P.L.258-1989, SEC.2. Amended by P.L.197-1991,
SEC.1; P.L.198-1991, SEC.1; P.L.1-1992, SEC.157; P.L.89-1998,
SEC.1.
IC 28-9-3-5
Garnishment of deposit account; notice requirements
Sec. 5. (a) The information specified in section 4(b)(3)(B) through
4(b)(3)(C) of this chapter and the legend set forth in subsection (c)
must be printed more conspicuously than the other information
specified in section 4(b)(3) of this chapter. The information specified
in section 4(b)(3)(B) through 4(b)(3)(C) of this chapter and the
legend set forth in subsection (c) may be made more conspicuous in
any way that highlights it in relation to the other information
specified in section 4(b)(3) of this chapter, including, but not limited
to, any of the following:
(1) Capitalization, when the other information is printed in
capitals and lower case.
(2) Printing in larger type, boldface print, or differentiated
typeface.
(3) Printing in a contrasting color.
(4) Underlining.
(b) Use of the following forms will constitute compliance with the
notice requirements of section 4(b)(3) of this chapter:
NOTICE OF CERTAIN EXEMPTIONS
AND
YOUR RIGHT TO A PROMPT HEARING
It may be that the plaintiff has or will give notice to your bank
or other persons holding property or assets for you of the intent
to put a hold on certain accounts held by you, either
individually or jointly with another person, including, but not
limited to bank, share, and credit union accounts. Under Indiana
law, this notice may already have resulted in the placing of a
hold on those accounts. UNDER FEDERAL AND STATE
LAW, CERTAIN FUNDS ARE EXEMPT FROM
GARNISHMENT. THIS MEANS THAT THESE FUNDS
MAY NOT BE TAKEN BY CREDITORS EVEN IF THEY
HAVE BEEN DEPOSITED INTO YOUR ACCOUNTS.
SOCIAL SECURITY, SUPPLEMENTAL SECURITY
INCOME, VETERANS BENEFITS, AND CERTAIN
DISABILITY PENSION BENEFITS CANNOT BE TAKEN.
THERE MAY BE OTHER EXEMPTIONS UNDER STATE
OR FEDERAL LAW. IF YOU OR ANOTHER PERSON WHO
MAINTAINS A JOINT ACCOUNT WITH YOU BELIEVE
THAT ALL OR SOME OF THE FUNDS IN THESE
ACCOUNTS ARE EXEMPT, YOU OR YOUR JOINT
DEPOSITOR ARE ENTITLED TO A PROMPT HEARING IN
THIS COURT TO PRESENT EVIDENCE TO ESTABLISH
EXEMPTIONS AND TO SEEK REMOVAL OF THE HOLD.
To obtain such a hearing, fill in the form marked "Exemption
Claim and Request for Hearing" attached hereto and return it to
this court either by mail or by personally bringing it to the
court. A copy of that form should also be sent to plaintiff's
attorney or to the plaintiff, if the plaintiff is not represented by
an attorney, at the address set forth below. A prompt hearing
will be scheduled by the court as soon as possible, but generally
no later than 5 days (excluding Saturdays, Sundays, and legal
holidays) after the completed form is received by the court.
Please call the court at (___) __________ to find out when the
hearing is scheduled. When calling the court, please have the
cause number handy. The cause number is located at the top of
the right-hand side of this document. After the hearing, the
court will decide whether all or part of the funds in each
account on which a hold has been placed or other accounts in
which you have an interest may be taken by the plaintiff.
If a joint depositor or you do not request an early hearing, there
will be a hearing at the time when you are ordered to appear. At
that hearing, you and a joint depositor are entitled to assert any
exemptions. However, if a joint depositor or you do not request
an early hearing, each account on which a hold has been placed
may not be released until the time you are ordered to appear.
EXEMPTION CLAIM AND REQUEST
FOR HEARING
THE HONORABLE JUDGE OF THE
COURT OF ___________ COUNTY
ROOM NO. ___________
__________________________________________
(Address)
__________________________________________
(City, State, Zip)
Re: Cause No. _________
I believe that all or part of the money in my account(s) that may have
been frozen cannot be frozen since the account(s) contain exempt
funds. I would like a hearing at the earliest time.
________________________________
(Signature)
Check One:
_______ I am the judgment defendant.
_______ I maintain a joint account with the
judgment defendant.
(c) The notice required by section 4(b)(3) of this chapter may be
placed on the reverse side of the order to appear directed to the
judgment defendant, in which case the obverse side of the order to
appear shall contain substantially the following legend: "See reverse
side for important information concerning your exemption and other
rights.". However, in any case, the adverse claimant or an attorney
representing the adverse claimant must serve or cause to be served
this notice upon the judgment defendant in accordance with the
applicable rules of court before or promptly after the notice is served
upon the depository financial institution.
As added by P.L.258-1989, SEC.2. Amended by P.L.197-1991,
SEC.2.
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