How Do I Collect on a Judgment?
How to Collect on a Money Judgment?
Winning a Judgment may be only half the battle... collecting it, the other half.
When you win a Judgment in City Court, the Court sends a Notice of Judgment to the parties. The losing party, the Debtor, has thirty (30) days to pay the Judgment. The winning party, the Creditor, should first contact the losing party, the Debtor, to attempt to collect the judgment. If the Debtor fails to pay, the winning party, the Creditor, may take steps to collect or execute the Judgment including:
- Seizing personal property or assets
- Filing a lien against real property
- Filing an income execution or wage garnishment
In some instances, you may not be able to collect on a judgment. These include if a judgment debtor has filed for bankruptcy or if the judgment debtor has filed an appeal and has stayed the judgment.
Seizing Personal Property or Assets:
An execution issued out of a City Court may be levied against, that is, used to seize, only personal property of the Judgment Debtor (UCCA Section 1504). The enforcement officer of City Court is the County Sheriff (UCCA Section 105[b]).
Before the County Sheriff can seize personal property or assets of the Debtor, the Creditor must first identify the property to be seized. To learn the Debtor's assets, a Creditor may request an Information Subpoena from the City Court for a fee. An Information Subpoena is a legal document that directs the Debtor to answer certain questions regarding the existence and location of assets as well as employment and wage information. (Although usually served on the Judgment Debtor, an Information Subpoena may be served on another person or corporation, such as a bank, that has knowledge regarding the Debtor's assets.)
Upon the filing of a request for an Information Subpoena and payment of the filing fee, the City Court Clerk will provide you with the Subpoena, which consists of two sets of Questions and a cover letter. You must mail the cover letter, both sets of Questions, and a prepaid, addressed return envelope to the individual or institution being asked to answer the questions. It is recommended that you mail the forms by certified mail, return receipt requested, so that you can provide proof of mailing to the Court in the event that the completed Questions are not returned to you. The individual or institution directed to answer the questions must do so within seven (7) days of receipt.
If you do not receive a response to the Information Subpoena, you may commence a contempt proceeding against the individual who failed to answer the Subpoena. A Creditor may commence a contempt proceeding by filing the proof of service (for example: the certified mail receipt) of the Information Subpoena with the Court. The Court will then schedule a date for the other party to provide the Information SJanuary 31, 2013ormation has not been provided. If that party fails to appear on the date set, the Court will issue a Contempt Order and the person shall be in contempt of court until they provide the information demanded.
Once a Creditor receives the Information Subpoena or if the Creditor is already aware of the personal property of the Debtor, the Creditor may proceed with the execution of the Judgment. The levy on, or seizure of, a Judgment Debtor's personal property by the use of a property execution is the most common method for enforcing a money judgment. Before proceeding to the enforcement officer, the Sheriff, to execute the judgment, the Creditor must file a Transcript of Judgment with the County Clerk (UCCA 1505)(see below). After filing the Transcript of Judgmentwith the County Clerk, the Creditor must provide the enforcement officer, the Sheriff, with instructions identifying the property and its location, as well as the names and addresses of other people who must be served with the notice that the property is being seized. The completed Information Subpoena will provide some, but not necessarily all, of this information to the Creditor. Once assets are identified, the enforcement officer can seize assets and sell them at an execution sale, applying the proceeds to the Judgment. However, the Sheriff cannot seize all property belonging to the Debtor. Certain property is exempt from seizure under New York law (Civil Practice Law & Rule [CPLR] Section 5205).
Filing a Lien Against Real Property (Requesting a Transcript of Judgment):
As indicated above, a Judgment from City Court may be levied only against personal property of the Judgment Debtor. By obtaining a Transcript of Judgment for a fee (payable by cash or money order only) from the City Court and then filing or docketing that Transcript in the County Clerk's office (for an additional fee), a Creditor creates a lien against any real property, that is, real estate, the Debtor owns in the county. If the Debtor should move or if the Debtor owns real property in another county, the Creditor may obtain a Transcript of the Judgment from the County Clerk's office and file it in another county within New York State. Once a Transcript is filed with the County Clerk, there is a public record of the Judgment against the Debtor which could affect the Debtor's credit rating or ability to borrow money. A Judgment against the Debtor remains as a lien against real property for a period of ten (10) years, renewable for an additional ten (10) years.
The Creditor should also be aware that once a Transcript of Judgment is filed with the County Clerk, any future matters concerning the enforcement of the judgment become the jurisdiction of the County Court, not the City Court. The only proceeding which can be initiated in the City Court after the filing of the Transcript is for the issuance and enforcement of an Information Subpoena.
Filing an Income Execution:
In addition to a lien on personal property, a Judgment Creditor may also use other enforcement methods to collect a debt. The Creditor can file an Income Execution or wage garnishment to obtain a percentage of the Debtor's earnings to apply to the Judgment. The judgment creditor may contact the Sheriff's Civil Department for the procedure to file an income execution or wage garnishment. Again, as with the procedure for seizing personal property, the Creditor will need to inform the Sheriff about certain information, namely, the Debtor's employer, the employer's address and wages of the Debtor. This information can be obtained by requesting an Information Subpoena from the City Court Clerk. Additionally, a Transcript of Judgment must be filed with the County Clerk before the Sheriff will proceed to enforce a judgment by income execution.
If a Debtor files for bankruptcy during the collection proceedings, then all further collection efforts cease until the Debtor is released from Bankruptcy Court. The Creditor should contact the trustee in bankruptcy to determine if the debt will be paid or discharged by the Bankruptcy Court.
Satisfaction of Judgment:
If a Transcript of Judgment has been filed with the County Clerk, once the Debtor pays off the Judgment, the Creditor has a legal responsibility to prepare and sign a Satisfaction of Judgment for the benefit of the Debtor, so that all liens and record of Judgment can be removed from the County Clerk's office. The Creditor must either file the Satisfaction of Judgment with the County Clerk, or provide it to the Debtor so that the Debtor may file it with the County Clerk. The Satisfaction of Judgment must also be filed with the City Court. A Satisfaction of Judgment form can be purchased from any stationary store.