How Do I Collect on a Judgment?
…collecting the money owed is the other half.
Tools for Collecting Judgments | How Long Is a Judgment Valid For? | What Happens If a Debtor Files for Bankruptcy? | Satisfaction of Judgment
When you win a judgment in City Court, the Court enters the judgment in its records and sends a written "Notice of Judgment" to both sides. The winning party is now a CREDITOR and the losing side is a DEBTOR who owes and should pay the Creditor the amount due on the judgment. If the Debtor fails to pay, the winning party, the Creditor, may use different tools to collect the money owed. The following are some of the tools which can be used to collect the money due on a judgment:
Tools for Collecting Judgments
- Information Subpoena
- Income Execution on the wages of the debtor
- Seizing personal property owned by the debtor
- bank accounts
- Filing a lien against real property (land) owned by the debtor
Before property can be seized, the Creditor must find and identify what property is specifically owned by the Debtor. It is also the Creditor's duty to locate where the Debtor is employed.
An Information Subpoena is a legal document that requires the Debtor to give written answers to several written questions concerning what property they own, where it is located and where they may be employed. The Creditor can then use this information to seize the property or wages of the Debtor. While the Information Subpoena is most often served on the Judgment Debtor, it may also be served on other individuals or organizations (such as banks) to see if they are in possession of any property owed to or owned by the Debtor.
The Judgment Creditor may obtain an Information Subpoena from City Court for a $2.50 fee. The City Court will provide you with an Information Subpoena, two sets of written questions and a cover letter. The Judgment Creditor must serve the Judgment Debtor with the cover letter, both sets of questions and provide a postage pre-paid, addressed return envelope for the Debtor or institution to use to mail the answered questions back to the Creditor. You may have a process server serve the debtor with these papers or you may mail them to the Debtor. If you mail these forms to the Debtor, you may wish to use certified mail, return receipt requested, so that you will have written proof of mailing and a receipt to show the Court if the Debtor fails to answer or return the questions. The Debtor or institution must answer the questions within seven (7) days of receipt.
If the Debtor does not answer the questions or return the questions in time, the Creditor may commence a "Contempt of Court" proceeding against the Debtor. If the Debtor is found to be in Contempt of Court, the Court may punish the Debtor by fine or jail sentence. The Debtor may also be ordered to pay the Creditor for the costs of the Contempt of Court proceeding.
To commence a Contempt of Court proceeding, the Creditor must file a request for an "Order to Show Cause" with City Court. The Order to Show Cause form (Blumberg T419) can be purchased at a business supply store and must be filled out and filed with the Court along with a copy of the Information Subpoena and proof (Affidavit of Service) that it had been served on or mailed to (Certified Mail Receipt) the Debtor.
If the Judge grants the Order to Show Cause, it will require the Debtor to appear in City Court to show cause why they should not be punished for failing to properly answer the questions in the Information Subpoena. The Order to Show Cause will contain a Court date and will also contain a date before which the Debtor must be served with the Order to Show Cause.
The Creditor must serve the Debtor with the Order to Show Cause and file with City Court, an Affidavit of Service and a copy of the Order to Show Cause that was served on the Debtor. If the Debtor fails to appear in Court, or fails to answer the questions in the Information Subpoena, the Court may find the Debtor in Contempt of Court and punish them as deemed appropriate by the Court. The Creditor must notify the Court in writing for the Court to proceed with punishment.
Debtors, in Contempt of Court proceedings, often offer to pay all or part of the unpaid judgment in return for not being found in Contempt of Court. At the very least, the Debtor normally provides answers to the questions in the Information Subpoena. This information may then be used by the Creditor to collect the money due on the judgment.
If a Judgment Creditor knows where a Judgment Debtor is employed, the Creditor can file an Income Execution (Blumberg form #T439) on the wages of the Debtor. The income execution form can be purchased at a business supply store.
The Creditor must fill out the income execution and file it with City Court. The City Constable will then serve the income execution on the Debtor's Employer. If the Debtor is earning sufficient income, the Employer must deduct 10% of the Debtor's weekly earnings and send it to the City Constable who will in turn send the money to the Judgment Creditor.
The City Constable is Mr. David R. Grier, 705 Laurel St., Elmira, NY 14904, 607-733-6293. There is no charge for filing an income execution.
If a Judgment Creditor knows that the Judgment Debtor owns a car, truck, motorcycle or other personal property of significant value, the Judgment Creditor may file a Property Execution (Blumberg form #X120) asking that the property be seized and sold with the sole proceeds being used to pay off the balance due on the Debtor's judgment. There is no charge for filing a property execution.
If the Judgment Creditor knows that the Judgment Debtor has a bank account at a specific bank, the Judgment Creditor may also use a property execution to ask that the money in the bank account be seized and used to pay off the balance due on the Debtor's judgment.
Filing a Lien Against Real Property (Land Owned by Debtor)
A Judgment Creditor may find that a Debtor has disappeared or is unemployed and has no personal property to be seized. Is there anything the Creditor can do to increase their chance of someday collecting the money due on their judgment?
A Judgment Creditor can make their City Court Judgment more powerful by filing their judgment in the County Clerk's Office. How is this done? The Judgment Creditor requests a "Transcript of Judgment" from the City Court Clerk. The cost for the transcript is currently $6.00 (payable by cash or money order to the City Court). The Judgment Creditor would then take the Transcript of Judgment and file it in the County Clerk's Office. The cost of filing the transcript is currently $10.00 (payable by cash or money order to the County Clerk).
What is the effect of filing a transcript of judgment in the County Clerk's records?
- The judgment becomes a lien on any land currently owned or later acquired by the Debtor anywhere in the County. In most cases, the land cannot be sold until the judgment is paid.
- The Credit Agencies often check the County Clerk's records to see if a person has any judgments filed against them. If the Judgment Debtor attempts to obtain a loan to purchase a vehicle or a mortgage to purchase a home, they are often denied credit approval unless they first pay off any unpaid judgments.
A Judgment Debtor may also be denied a credit card until the judgment is paid. If a Judgment Debtor dies and the judgment is on file with the County Clerk, the estate of the deceased debtor may be ordered to pay off the balance due on the judgment.
How Long Is a Judgment Valid For?
A judgment is valid for ten (10) years and may be extended once for an additional period of ten (10) years. To extend a judgment for an extra ten (10) years, the Judgment Creditor must make written application to the City Court.
The Judgment Creditor should also be aware that once a Transcript of Judgment is filed with the County Clerk, any further matters concerning the enforcement of the judgment becomes the jurisdiction of County Court and NOT the City Court. The only proceeding which can be initiated in City Court after the filing of the transcript of judgment, is the issuance and enforcement of an Information Subpoena.
What Happens If a Debtor Files for Bankruptcy?
If a Creditor receives written notice that a Judgment Debtor has filed for bankruptcy, all further efforts to collect the judgment are stayed (put on hold) until the Bankruptcy Court makes a decision as to how the assets of the Debtor should be divided. The Creditor should contact the Trustee in writing at the address listed on the Notice of Bankruptcy to file a claim and to find out whether the judgment debt will be paid or discharged (cleared) by the Bankruptcy Court.
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 most business stationary stores.