If a creditor gets a court judgment against you, it can’t enforce it until it’s entered by the court clerk. If you don’t pay the judgment voluntarily, the judgment creditor has several debt collection options at its disposal. In addition to options like wage or bank account garnishment, the creditor could contact an enforcement officer for assistance.
Written by Attorney John Coble.
Updated March 7, 2022
If a creditor sues you and you lose, the creditor can get a money judgment against you. But not everyone who has a money judgment against them pays it voluntarily. Having the judgment gives the creditor access to serious debt collection tools like wage garnishment or a bank account levy. This article discusses how judgments are used in the debt collection process and what strategies creditors use to collect on judgments.
A Judgment Must Be Entered Before Debt Collection Activities Can Begin in New York State
If a person or company wins a lawsuit against you, they get a court judgment. At that point, they’re called a judgment creditor and you’re called a judgment debtor. A judgment creditor can also get a default judgment against you if you fail to show up in court.
The judgment creditor can start debt collection procedures on the judgment as soon as it’s entered. Entering it means the clerk of court signs and files it. Before the judgment is entered, the judgment creditor has to serve a notice of entry on the judgment debtor notifying them of a 30-day appeal period.
After the debtor is served with the notice of entry, collections can begin. The judgment creditor must file an affidavit of service with the court, which is a sworn statement that the judgment creditor has served the judgment and notice of entry.
What if the Judgment Debtor Doesn’t Pay?
While having a money judgment gives a judgment creditor the right to collect, sometimes judgment debtors don’t voluntarily pay the judgment. In this case, the creditor can use an enforcement officer or judgment enforcement techniques like wage garnishments, bank account levies, or property seizures. These are costly and time-consuming, so judgment creditors are often willing to work with debtors even after they’ve lost a lawsuit. It’s easier for everyone if an acceptable payment agreement can be reached.
Using an Enforcement Officer for Judgment Enforcement
If a creditor has a money judgment, it can hire an enforcement officer to collect money and property from a judgment debtor. An enforcement officer is a sheriff, police officer, city marshal, town constable, or village constable that’s authorized to take the debtor's property or money to pay the judgment. The type of enforcement officer may vary depending on whether the judgment came from the New York Supreme Court, civil court, or another court system. The judgment creditor may have to make an upfront payment or pay other fees to the enforcement officer, which are often added to the amount the judgment debtor owes.
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What Strategies Can Be Used To Collect a Judgment Amount in New York State?
If you’re a judgment debtor, understanding how the judgment creditor will collect is important. They want your money. Their first preference is to take your money through wage garnishments and bank account levies. A wage garnishment or income execution allows the creditor to take money directly from your paycheck. There are limits to how much they can take, and several types of income can’t be garnished.
A bank account levy is similar. If you have a bank account, the judgment creditor can serve a restraining notice signed by the court clerk on your bank. This stops you from withdrawing money and allows the judgment creditor to take money directly from the account. The amount they can take is limited in the state of New York, and some types of income sources are exempt from being levied.
Judgment creditors can also get a transcript of judgment from the court to get a judgment lien. The lien attaches to any real property, like real estate, or personal property, like a car, that you own in the county where the judgment is recorded. This means you can’t sell your real or personal property without paying off the judgment. But the judgment creditor doesn’t have to wait until you sell something to collect its judgment. They can file a property execution. This allows an enforcement officer to take personal property and sell it to pay for at least part of the debt. This is typically a last resort for creditors because it’s expensive and time-consuming.
Other Ways a Judgment Creditor May Try To Collect
You could suffer a license suspension or treble damages in an effort to collect by a judgment creditor. If the legal action was for damages caused by a car wreck, the judgment creditor may be able to have your drivers’ license suspended. If the lawsuit involved the operation of your business or profession, the judgment creditor may be able to have your business or professional license suspended. When you pay off the judgment, the state should release these suspensions.
New York law prohibits debtors from transferring their property for less than full value in certain situations — such as when they’re facing a judgment. This means you can’t give the property to someone for free (change name on the title). And you can’t sell property for less than what it would normally bring. These practices are called fraudulent conveyances or voidable transactions.
Confessions of Judgment
Some contracts — especially debt settlement payment agreements — contain a confession of judgment provision. A confession of judgment allows a creditor to record a judgment against you without having to go to court and win. Confessions of judgment are only valid for three years after they're signed.
New York passed new protections from confessions of judgment abuses in 2019. One of these new provisions says that confessions of judgment in New York contracts against debtors living outside the state aren’t enforceable. These are called foreign judgments. These provisions are only enforceable in the county where the debtor lived at the time the confession of judgment was signed.
New York Judgment Statute of Limitations
A judgment creditor can’t try to collect from you forever. The statute of limitations for collecting on a New York judgment is 20 years, which starts the day the judgment creditor is first able to collect on the judgment. This timeline can sometimes be restarted.
How Can the Judgment Debtor’s Assets Be Located?
A judgment creditor may file an information subpoena with the county clerk. The information subpoena is a list of written questions the judgment creditor will use to determine where you have assets it can take to satisfy the judgment. After the information subpoena is filed, the clerk will send you a copy of this court order. You must answer the questions within seven days of when you’re served with the subpoena.
If you don’t answer the questions in a timely and truthful manner, the judgment creditor can file a motion for contempt with the court. At this point, you can be fined or jailed. You can’t be put in jail for not paying the debt, but you can go to jail for failing to answer the information subpoena.
Judgment creditors can also find your assets by:
Looking at any check you’ve sent to them in the past to determine where you have bank accounts,
Contacting the DMV to get information on any cars you own,
Doing a property search at the county clerk’s office where you live, or
Hiring an asset search company to find things you own.
Having a court award a judgment against you isn’t a good feeling, and you may not want to pay it. But remember that the judgment creditor has access to many post-judgment debt collection tools. And judgments can be enforced as soon as they’re entered by the court clerk.
Though there are limits, New York allows several debt collection options. Judgment creditors can garnish your wages or bank account or seize your property and sell it. In some cases, you could even have your drivers’ license or business license suspended.