*The information found on this website is not legal advice, and should not be considered as such or be relied upon in any way.

​

How Collections Works

So a Court has said that you are entitled to a certain amount of money from another individual or entity.  In other words, you have won a money judgment.  The only problem is.......now what?  There is a saying in the law that "attorneys wallpaper their offices with money judgments," meaning that this is all they are useful for, wallpaper.  Based upon our experience we would say that this is true for the majority of attorneys, as most are helpless when it comes to actually getting their clients paid after obtaining a money judgment.  At Stephen C. Giametta & Associates after we obtain judgment in your favor or if you already have an existing judgment, we will exhaust every possible option that is available to actually turn that judgment into actual money.

​

The Parties

If you take a look at our Civil Litigation page you will see a description of the parties to a typical lawsuit, which are a Plaintiff and a Defendant.  After a lawsuit ends with a money judgment in favor of one party, however, these titles change to judgment creditor and judgment debtor.  The judgment creditor is the party in whose favor the judgment is entered, and the judgment debtor is the party against whom the judgment is entered.  This means that it is not automatic that the Plaintiff turns into the judgment creditor, although it is the most common scenario.  If the plaintiff lost its case, and the Defendant brought a successful counterclaim for monetary damages, the Defendant would actually become the judgment creditor, and the Plaintiff would be the judgment debtor.

 

Income Executions (Wage Garnishment)

Most people have heard of the term Income Execution, which is also referred to as a Wage Garnishment.  The concept is rather simple, execute (i.e. enforce) a money judgment against a judgment debtor's income.  Unfortunately, unless you are experienced in this area, the actual execution of this concept can be somewhat daunting.

​

To begin, it is the judgment creditor that first needs to determine the name and address of the judgment debtor's employer (see more on this in the "You're on Your Own" section below).  Once this is determined the judgment creditor must properly complete an appropriate wage garnishment form and provide such to the Sheriff (Suffolk and Nassau Counties) or City Marshal (Bronx, Queens, Richmond, Kings and New York Counties) for execution.  In providing the wage garnishment to the Sheriff or Marshal the judgment creditor must comply with the rules of that particular Sheriff or Marshal regarding number of copies and the supporting documentation required for that office to proceed.  The Sheriff or Marshal will then serve the wage garnishment upon the judgment-debtor.  Should the judgment-debtor fail to respond, the Sheriff or Marshall will serve the papers upon employer that the judgment-creditor provides in the wage garnishment form.  Should that employer refuse to comply by making the necessary deductions and sending them to the Sheriff or Marshal, the judgment-creditor has the option to file a motion for contempt against the employer.  For anyone who has been told that the Sheriff or Marshal will take action against an employer that fails to comply (such as an arrest, citation or the filing of charges) please know that this is a complete falsehood. 

​

As you might imagine, the amount a judgment-creditor is permitted to garnish is not unlimited.  In New York, a judgment-creditor can garnish the lesser of two things:  10% of your gross wages (gross, not net) or 25% of your disposable income if your disposable income is 30% more than the minimum wage.  Disposable income is what is left after all deductions required by law are taken into account (taxes, social security, etc.).  If the deduction is not required by law (i.e. a 401k deduction) is does not count in the calculation of your disposable income.  It should also be noted that if your disposable income is less than 30 times minimum wage no garnishment at all is permitted.  Click on the following link for more information on the formula for wage garnishment.

​

In speaking about income executions we would be remiss if we did not mention "poundage."  For its efforts in assisting the judgment-creditor obtain payment on a money judgment via a wage garnishment, the Sheriff or Marshal is entitled to what is commonly referred to as "poundage."  Poundage equates to 5% of the amount that the Sheriff or Marshal actually collects.  There is a fortunate and unfortunate side to poundage as it relates to the judgment-creditor.  Fortunately, the 5% in question is not taken out of what the judgment-creditor is owed, but is instead added to the amount of the judgment itself.  As such, the Sheriff or Marshal is paid by the judgment-debtor and there is no harm done to the judgment-creditor.  Unfortunately, once the Sheriff or Marshal begins the process of wage garnishment it is entitled to poundage, regardless of whether the wage garnishment is what actually leads to the recoupment of money.  As an example, say the wage garnishment process has begun and that the judgment-debtor contacts the judgment-creditor thereafter to make voluntary payments to settle the action.  In this scenario the Sheriff or Marshal will still be entitled to its 5% of poundage on whatever amount is paid to the judgment-creditor even though the money did not come from the wage garnishment itself.  In other words, unless it is worked into the settlement amount agreed to by the parties the poundage is actually being paid by the judgment-creditor.

​

Bank Levies

Bank levies are somewhat similar to an income execution.  First, similar to the burden being placed on the judgment-creditor to find an employer of the judgment-debtor upon whom to serve an income execution, so too must the judgment-creditor locate a bank at which the judgment-debtor holds funds.  This is typically accomplished through the use of an information subpoena issued by the judgment-creditor's attorney.  Once a bank account for the judgment-debtor is found the bank, if properly served with a restraining notice, will restrain (lock, freeze) all funds in the account up to the amount of the judgment, plus interest (see below for limits and exceptions).  Additional information can be found at CPLR Section 5222.

​

At the same time funds are frozen the bank has an obligation to advise the account holder in writing that such has occurred.  Moreover, the bank has a similar obligation to review the funds in the account for any indication that they may be exempt from collection, and to send a notice to the account holder that permits he/she to advise the bank that the funds therein are exempt.  The typical claim of exemption is that the funds are solely from Social Security Income, but the entire list of exemptions are listed in CPLR Section 5222-A.  Should the account holder fail to claim an exemption and the bank not find any of the funds exempt the judgment-creditor's attorney can taken appropriate action to obtain the funds in the account.

​

Another similarity of a bank levy to an income execution is that there are rules as to how much can be taken.  New York's Exempt Income Protection Act (EIPA) states that a minimum amount is not subject to collection by a judgment-creditor.  The amount is based upon a calculation involving the minimum wage so it depends upon the time the lawsuit is filed and geographic location.  For 2018, the amounts vary between $2,496.00 and $3,120.00.  If statutorily exempt funds are deposited into the account at any time during the 45 days prior to the issuance of the restraining notice the amount of $2,750.00 is automatically deemed exempt.  The EIPA is complex and filled with many nuances, however, so these amounts may vary and are always subject to change. See CPLR Section 5222-i for more information.

​

Finally, should the bank account in question be held by the judgment-debtor and at least one other individual against whom the same judgment does not apply, an additional step must be taken by the judgment-creditor before any funds can be released.  This step is called a Turnover Petition, and it takes the form of a Petition (a new, separate action) being commenced in the same court that issued the judgment.  The Petition seeks an Order from the Court directing the bank to turn over the funds in the account to the judgment-creditor.  As the judgment-debtor, joint account holder(s) and the bank itself must all be made a party to the Petition, all three (at least) must be served with the Petition, meaning all three have the option of challenging the relief being sought.  Though it is rare for the Bank to appear for such a Petition (the bank typically takes no position as to whether the funds should turned over to the judgment-creditor), it is not uncommon for the judgment-debtor or joint account holder(s) to appear and challenge the position.  If the joint account holder can show that all of the funds in the account are actually his/hers, and that the judgment-debtor is simply listed on the account for emergency purposes there is a chance that the Petition will be denied.  Although this is not a guarantee to defeat the Petition, nor the only way to do so, it is one of the more common reasons that such Petitions are denied.

​

Property Liens

Property liens come in two categories.  The first is a lien against personal property, such as cars and equipment.  Executions against personal property must be carefully scrutinized to determine if it is truly worth proceeding, but can indeed be effective.  The procedure employed is somewhat similar to a bank levy, except the property must be physically taken and sold by the Sheriff or Marshal.  This means additional funds due to the Sheriff or Marshal, typically to be paid in advance.  This, coupled with the fact that there are exceptions and limits assigned to a judgment-debtor's personal property mean that the judgment-creditor should do a thorough analysis to be certain that proceeding in this manner is monetarily worthwhile. 

​

The second type of property lien is a lien against real property (i.e. real estate).  Although a foreclosure proceeding can be commenced against real property in an attempt to obtain payment of the judgment, there are typically many factors and hurdles to clear in this regard that may make such impossible or impractical.  These factors include, but are not limited to, the amount of the judgment, the number and place in line of other creditors, the number of creditors that are secured (typically a mortgage holder), how the property is held if owned by a married couple.  The better reason to take steps to secure a lien against real property is not to actually sell it, but to keep it from being sold or refinanced without payment to the judgment-creditor.  If a lien is in place, the judgment-debtor cannot do either of the above without the judgment-creditor getting paid.  This is why making sure a transcript if properly filed is the first step that should be taken.  Not only is it necessary to employ any of the above methods of collection, but it will act to effectuate a lien being placed on any real property owned in that county by the judgment-debtor, whether that judgment-creditor knows about the existence of the real property or not.

​

*Property liens are good for 10 years, but can be renewed for an additional 10 thereafter by the filing of an appropriate Motion to Renew with the Court that issued the original judgment.

​

Miscellaneous Methods

In addition to the above it should be noted that there are times when the following methods can also be employed to leverage payment of a money judgment:

​

• suspension of motor vehicle registration, and or driver’s license, if the underlying claim is based on the judgment debtor’s ownership or operation of a motor vehicle;

• revocation, suspension, or denial of renewal of any applicable business license or permit;

• investigation and prosecution by the State Attorney General for fraudulent or illegal business practices, and;
   

The instances when such devices are used is very fact specific, however, so the earlier stated methods should always be attempted prior to venturing into these areas.

​

You're On Your Own

First and foremost, it should be noted that all of the above methods of execution require that a transcript of the judgment be filed in the county where the assets have been found.  If the assets are found in the same county in which judgment was obtained the transcript is already deemed filed upon the entry of the judgment, provided the action was venued in Supreme Court.  For actions venued in Civil Court (in New York City) or District Court (in Long Island), the judgment-creditor must obtain a transcript of the judgment from the lower court  and then file such with the appropriate county clerk's office.  The Court does not do this on your behalf.

 

In addition, the information necessary to enforce a judgment, such as the name of an employer or bank, is not always easy to find.  Most importantly, it is not something that is provided by the Sheriff, Marshal or even the Court that granted the judgment. The Court's job is to look at the facts and the law to determine if a judgment should be granted, and if so, to direct the entry of such.  As such, the Courts of the State of New York play no role in helping to enforce a judgment.  That burden rests solely on the shoulders of the judgment creditor or his/her attorney.  As such, those experienced in the field of collections, such as Stephen C. Giametta & Associates, P.C., are typically better equipped to proceed with judgment enforcement.