We’ve Got Answers: Your Questions About Judgement Mediation Part Two
Q: What tools are available to prevent a judgment debtor from transferring assets and to collect on a judgment?
A: CPLR § 5222 permits a judgment creditor to serve a restraining notice on a judgment debtor or on any person or entity that owes a debt to the judgment debtor or possesses property in which the judgment debtor has an interest. Depending on the circumstances, that may include judgment debtors’ banks or other financial institutions, landlords, employers, business partners, or other third parties holding money or property belonging to the debtor. A restraining notice has the same force and effect as a court order and can prevent assets from being transferred while collection efforts are ongoing.
Once assets have been identified, a judgment creditor may either seek a turnover order directing the debtor or a third party to turn over funds or property to satisfy the judgment, or pursue collection through an execution and levy, which authorizes a sheriff or marshal to seize assets for application toward the judgment.
These remedies can be extremely effective, but they must be used carefully and with attention to the CPLR’s strict procedural requirements. For example, New York law does not permit a judgment creditor to serve blanket restraining notices on every financial institution in the hope of locating assets. In addition, certain funds, such as disability benefits, may be “exempt” from restraint. Improper enforcement efforts can result in significant consequences for both the judgment creditor and its counsel.
For that reason, judgment enforcement is an area where experience matters. Experienced judgment enforcement counsel can help identify appropriate enforcement targets, utilize the proper statutory remedies, and maximize the likelihood of recovery while minimizing unnecessary risk.
Jennifer Karnes is a Shareholder in Becker’s New York office, a member of the firm’s Litigation practice groups, and a former Brooklyn felony prosecutor. She can be reached for scheduling at jkarnes@beckerlawyers.com or by phone at (212) 599-3322, and you can read more about her background here.
