How Do I Collect on a Judgment?
- Information subpoenas
What if the losing party files for Bankruptcy?
Satisfaction of Judgment
Winning a Judgment may be only half the battle... collecting
it, the other half.
When you win a Judgment in City Court, the Debtor is either notified in the Courtroom, or the Court sends a Notice of Judgment to the parties. The losing party (Debtor) has thirty (30) days to pay the Judgment. If payment is not made, the Creditor should contact the Debtor to attempt to collect the judgment. If the Debtor fails to pay, the Creditor may take steps to collect or execute on the Judgment, including:
- Seizing personal property or assets
Filing an income execution or wage garnishment
Filing a lien against real property
For assistance in your efforts to collect on a Judgment, you may wish to contact an attorney, or your Supreme Court Law Library. In Clinton County, the Law Library is at 72 Clinton Street, Plattsburgh. There is also helpful information on the website of the Clinton County Sheriff.
In some circumstances, you may not be able to collect on a Judgment. These include when a Judgment Debtor has filed for bankruptcy, or has filed an appeal and has obtained a “stay” of the Judgment.
Seizing Personal Property or Assets
An execution (Judgment) issued out of City Court may be used to seize property of the Judgment Debtor. Uniform City Court Act (UCCA) 1504. The enforcement officer for the City Court is the County Sheriff. UCCA 105(b). A Creditor who knows where the Debtor works or has a bank account, can take the Judgment to the Sheriff’s Office, along with the information about accounts or other personal property, and follow the procedure there to “seize” the property. Go to the Sheriff’s website for information.
Before the Sheriff can seize property 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 of the Debtor’s assets. When the Information Subpoena is served on an individual or entity other than the Judgment Debtor, the Judgment Creditor must include the following certification:
|I HEREBY CERTIFY THAT THIS INFORMATION SUBPOENA COMPLIES WITH RULE 5224 OF THE CIVIL PRACTICE LAW AND RULES AND THAT I HAVE A REASONABLE BELIEF THAT THE PARTY RECEIVING THIS SUBPOENA HAS IN THEIR POSSESSION INFORMATION ABOUT THE DEBTOR THAT WILL ASSIST THE CREDITOR IN COLLECTING THE JUDGMENT.||
Please note that Information Subpoenas that do not contain this Certification are null and void. An individual or entity other than a Judgment Debtor who is served with an Information Subpoena containing this Certification may move to quash the subpoena pursuant to CPLR 2304.
When you request an INFORMATION SUBPOENA and pay the 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 Questions by Certified Mail, Return Receipt Requested, so that you can provide the Court with proof of mailing if the completed Questions are not returned to you. The person or institution must answer the Questions within seven (7) days of receipt.
Request to Compel Compliance
If a response to the Information Subpoena is not made within 7 days of the debtor’s receipt of it, the Creditor may “move to compel compliance” (CPLR § 2308-b) . A Creditor does this by notifying the City Court in writing that you request the Court to Order Compliance with the Information Subpoena.
Your request must include: (1) docket number, (2) names of the parties, (3)Judgment amount, (4) date of the Judgment, (5) any payments received, along with the dates of the payments, and (6) the signed return certified mail receipt, returned unclaimed letter or other document (like an affidavit) showing proof that you mailed the Information Subpoena to the Debtor. When you send your Request to Compel Compliance to City Court, at the same time you must send a copy to the Debtor by certified mail, return receipt requested, and provide that certified mail receipt to the Court.
The Court will then schedule a date for the person or entity to provide the Information Subpoena answers to the Court, or to appear in Court to explain why the Questions have not been provided. When the person or entity who was served with the Information Subpoena appears, the Court can order compliance, and impose costs not exceeding $50, a penalty not exceeding $50, and damages sustained, if any, by reason of the failure to comply. If the Creditor is seeking costs or damages, they must be specifically requested in the Request to Compel Compliance.
If the person or entity fails to appear on the Court-ordered date, and has been warned in writing that jail is possible, then the Court can issue a warrant directing the Sheriff to bring them before the Court. If the person appears but refuses to answer the Questions without reasonable cause and the proper notification has been made, the Court may issue a warrant committing the person to jail.
Transcript of Judgment
Once a Creditor receives the Answers to the Information Subpoena Questions, or if the Creditor is already aware of the property of the Debtor, the Creditor may proceed with the execution of the Judgment. The seizure of the 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 Sheriff to execute the Judgment, the Creditor must obtain a Transcript of Judgment from the City Court Clerk for a fee (payable by cash or money order), then file that Transcript in the County Clerk’s Office (for an additional fee).
After filing the Transcript of Judgment with the County Clerk, the Creditor must provide 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 Answers to the Information Subpoena Questions will provide some, but not necessarily all, of this information to the Creditor.
Once assets are identified, the Sheriff can seize them and sell the assets 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 & Rules (CPLR) 5205.
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. A Transcript of Judgment must be filed with the County Clerk before the Sheriff will enforce a Judgment by Income Execution. To learn the procedure for filing an Income Execution, the Creditor may contact the Sheriff’s Civil Department, or go on the Sheriff’s website.
Again, as with the procedure for seizing personal property, the Creditor will need to inform the Sheriff about specific information regarding the Debtor’s wages, employer, and the employer’s address. This can often be obtained through an Information Subpoena.
Filing a Lien against Real Property
By obtaining a Transcript of Judgment for a fee (payable by cash or money order only) from the City Court, and then filing that Transcript at the County Clerk’s Office (for an additional fee), a Creditor creates a lien against any real estate owned by the Debtor in the County. If the Debtor moves, or if the Debtor owns real estate in another county in New York, the Creditor may obtain another Transcript of Judgment from the County Clerk’s office and file it in the appropriate county within New York State.
Once a Transcript of Judgment is filed with the County Clerk, it 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.
Effect of Bankruptcy Filing
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
Once the Debtor pays off the Judgment, the Creditor has the legal responsibility to sign and file a Satisfaction of Judgment. Within twenty (20) days after receiving full payment, the Creditor must file the Satisfaction of Judgment with the City Court Clerk, and if a Transcript of Judgment has been filed with the County Clerk, then the Satisfaction must also be filed with the County Clerk. The lien and public record of Judgment will then be removed. Within ten (10 days) of filing the Satisfaction with the Clerk, the Creditor must mail a copy to the Debtor. CPLR 5020. It is best to use a Satisfaction of Judgment form, which can be purchased from a stationary or office supply store. In the alternative, the Creditor may write a letter containing all of the pertinent information identifying the case, sign it before a Notary, and send it to the appropriate Clerk and the Debtor.