If you have an unpaid debt, a creditor can sue you to get a judgment against you. This allows them to garnish your wages, levy your bank account, or file a judgment lien against your home or car. Judgments and judgment liens in New York are very powerful. Money judgments can be enforced for up to 20 years in New York.
Written by Attorney Jenni Klock Morel.
Updated April 6, 2022
A creditor who sues you for an unpaid debt can get a judgment against you. With a judgment, creditors can garnish your wages or levy your bank account. This means they can take money directly from your paycheck or bank account. The creditor that won a lawsuit against you can also file a judgment lien against real property (like your house) or personal property (like your car).
Judgments and judgment liens in New York are very powerful. Read on to learn about your rights as a judgment debtor.
What Is a Court Judgment?
A court judgment is a court or judge’s decision in a lawsuit. Once the court or judge reaches their decision in a case, the decision can only be enforced after the judgment is entered. This is done when the court clerk signs and files the judgment.
In the state of New York, judgments and legal procedures are governed by New York’s Civil Practice Law and Rules (CPLR). Judgments are made, entered, and enforced according to New York’s CPLR.
In New York, a judgment can remain on your credit report for up to 10 years. New York civil practice law allows a money judgment (defined below) to be enforced for up to 20 years, and even longer in certain circumstances. This means that as a judgment debtor, your judgment creditor can attempt to collect the full amount of the judgment, plus interest, for two decades.
Parties to a Court Judgment
The parties to a court judgment are the people or entities that were named in the civil court lawsuit or legal proceeding.
A judgment creditor is the winner of a lawsuit. In civil court, a judgment creditor is the person, company, or agency that the court decides has the legal right to recover money from the other person, company, or agency. That is, the other party or parties named in the lawsuit.
If you fall behind on your monthly payments, your creditor can sue you in state court. The statute of limitations is the amount of time a creditor has to file a lawsuit against you. If your creditor wins the suit, the court awards them a judgment, and they become a judgment creditor. These are often original lenders/creditors or debt collectors that filed suit in the Supreme Court of the State of New York. The supreme courts in New York state are similar to district courts or courts of general jurisdiction in other states.
A judgment debtor is the party who didn’t win the lawsuit. In civil court, a judgment debtor is a person, company, or agency that the court decides must pay a debt or pay damages to the judgment creditor that won the lawsuit.
If your creditor sues you for not paying a debt and wins, then they become your judgment creditor and you the judgment debtor.
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What Types of Judgment Can Be Imposed in the State of New York?
The standard procedure for NY courts to reach a decision and hand down a judgment in a lawsuit is after conducting a full trial. In lieu of the court’s standard procedure, the following judgments may also be imposed in New York.
If a plaintiff brings a lawsuit in civil court and the defendant doesn’t answer (reply to) the suit or make any type of motion within the time given, then the plaintiff can ask the court to grant a default judgment.
When the defendant doesn’t respond to the lawsuit to explain their side of the story, the court may “by default” give the plaintiff what they asked for in the complaint. In lawsuits for nonpayment of debt, this means the plaintiff creditor will get the right to collect the money they claim they’re owed, plus interest and court costs, typically. This often leads to a hefty default judgment being entered against the defendant — the person who fell behind on their debt payments.
Judgment creditors with a default judgment have the right to garnish the judgment debtor’s wages and levy (take money directly from) their bank account.
A summary judgment is the rarest type of judgment. A summary judgment is when the court finds in favor of one party in the case before the case goes to full trial.
The plaintiff or the defendant can motion (ask) the court for summary judgment. The court can only grant a summary judgment when there is no genuine dispute of material fact. In the vast majority of cases, facts are in dispute. Generally, juries serve as the triers of fact during a trial. Because most cases and the accompanying evidence have facts in dispute, summary judgments are rarely awarded.
Any judgment that involves payment of a sum of money is a money judgment. Money judgments typically include the debt itself, interest accruing on the debt, court costs, and attorney fees. Most states award court costs to the winner of the lawsuit. If the contract between the original creditor and borrower stipulates that the creditor can get attorney's fees if they sue the borrower and win, then attorney's fees will be included in the money judgment.
What Is a Judgment Lien?
A lien is a claim or legal right placed on property to secure the payment of a debt. For example, a car loan is a secured debt that places a lien on the title of the vehicle until you completely pay off the loan. If you default on your car loan payments, the lender has the right to repossess the vehicle because of the lien.
A judgment lien is a lien that attaches to property owned by the judgment debtor as a result of a court judgment.
In New York, a judgment lien can be placed on a judgment debtor’s real property or personal property to secure the collection of a money judgment. Real property is real estate, such as your house, condo, or other land. This means that in New York, a judgment creditor can place a judgment lien against your home. When sold, proceeds from the sale of your property may be seized and given to your creditor to satisfy the judgment.
Personal property is movable property — your property other than land and real estate. In New York, a judgment lien can be placed on your personal property, such as your car, boat, jewelry, art, or other valuable assets. In some states, judgment liens can only be placed on real property and not on personal property.
Judgment creditors can discover the location of assets owned by the judgment debtor by filing an information subpoena. These subpoenas can be served on a judgment debtor or on any person or corporation that the judgment creditor believes has knowledge of the judgment debtor’s assets.
Length and Limitations of Judgment Liens
To get a judgment lien, the judgment creditor must file a judgment transcript with the county clerk in the county where the judgment debtor’s property is located. An original judgment lien is valid for 10 years. If the judgment isn’t paid by the end of the first 10 years, then the judgment creditor can seek a renewal judgment on the lien that would be valid for another 10 years.
In New York, creditors can attempt to collect on judgments and judgment liens for up to 20 years total. Under certain circumstances, a judgment lien can even remain in effect for longer than 20 years.
Federal law provides for judgments from one state to be enforceable in another state, depending on where the judgment creditor lives or where their property is located. In certain situations, foreign judgments can be enforced in New York. Foreign judgments are judgments from other states.
Judgment liens are subject to exemptions, which protect up to a certain amount of a person’s assets. For example, the debtor’s primary residence is protected from creditors, including judgment liens, up to a certain amount under the homestead exemption.
If you’re being sued for nonpayment of debt or already have a judgment against you, it’s time to explore what debt relief options are available to you. It may be wise to seek legal advice or consult with a debt relief/bankruptcy attorney who’s knowledgeable about the enforcement of judgments in New York.
The judgment decision made in the New York Supreme Court can’t be enforced until the judgment is actually entered by the clerk. In addition to judgments that come after a full trial, the court can issue a default judgment or summary judgment.
All judgments involving the payment of money are known as money judgments. All types of money judgments — court judgments, default judgments, summary judgments — can be used in the state of New York to garnish wages, levy bank accounts, or attach a judgment lien to real or personal property. In New York, a judgment lien placed on a judgment debtor’s real or personal property can remain valid for as long as 20 years or more if certain conditions are met.