(1) A payer whose financial assets are, or money to be paid or compensation is, levied on under section 25c or another person with an interest in the financial assets may challenge the levy by submitting a written challenge with the title IV-D agency at the location specified in the title IV-D agency notice. A payer, or other person with an interest in the financial assets, must submit a written challenge under this section within 21 days after the financial institution, insurer, or carrier sends the payer a copy of the title IV-D agency notice as required by section 25e. A challenge to a levy under section 25c is governed by this act and is not subject to chapter 4 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287. A payer, or other person with an interest in the financial assets, who submits a challenge under this subsection may withdraw the challenge at any time by giving notice of the withdrawal to the title IV-D agency.

  (2) If the title IV-D agency receives a written challenge from a payer, or other person with an interest in the financial assets, within the time limit required by subsection (1), the title IV-D agency shall notify the financial institution, insurer, or carrier about the challenge and, within 7 days, shall review the case with the challenger. The title IV-D agency shall consider only a mistake in the payer’s identity or in the amount of the payer’s past due support, or another mistake of fact, as cause to release or modify the levy. If the title IV-D agency determines that a mistake of fact occurred, the title IV-D agency shall do 1 of the following:

  (a) If the mistake is the payer’s identity or that the payer does not owe past due support in an amount equal to or greater than 2 times the payer’s monthly support amount under a support order, notify the financial institution, insurer, or carrier and the payer that the levy is released.

  (b) If the payer does owe past due support in an amount equal to or greater than 2 times the payer’s monthly support amount under a support order, but the amount in the notice to levy is more than the payer owes, notify the payer of the corrected amount.

  (c) If the mistake concerns a fact other than those described in subdivisions (a) and (b), take action appropriate to the mistake.

  (3) If the title IV-D agency finds no mistake of fact, the title IV-D agency shall notify the payer or other person with an interest of that finding.

  (4) If the payer, or other person with an interest in the financial assets, disagrees with the title IV-D agency review determination under this section, the payer or other person with an interest may challenge the levy under section 25c by filing an action in the circuit court that issued a support order that is an underlying basis for the levy. A payer, or other person with an interest in the financial assets, must file an action under this subsection within 21 days after the title IV-D agency sends notice of its review determination and shall give the title IV-D agency notice of the action.

  (5) If an action is not filed in the circuit court within the time limit required by subsection (4), the title IV-D agency shall notify the financial institution, insurer, or carrier, directing the financial institution, insurer, or carrier to act in accordance with the title IV-D agency review determination under this section. If an action is filed in the circuit court within the time limit prescribed in subsection (4), the title IV-D agency shall notify the financial institution, insurer, or carrier, directing the financial institution, insurer, or carrier to act in accordance with the court decision.