Order for Judgment on Property
In civil court, a court enters judgment after the judge or jury comes to a verdict or the parties enter into a court-approved settlement. Generally, the order tells one party to pay money to another party. Many people assume that this order will result in an actual payment. However, the party who is ordered to pay—the debtor in commercial debt cases—may not actually pay. At Klapper & Fass, our commercial debt collections lawyers can help entities in New York and elsewhere seek an order for judgment on property to collect a debt.Pursuing an Order for Judgment on Property
Orders for judgment on property, also known as executions, are a way of collecting a money judgment that gives the debtor the option of either paying an official or having certain property seized and sold at auction.
In some cases, it is appropriate to create a lien against real property by obtaining a transcript of judgment and filing or docketing the transcript in the county clerk's office. Once the transcript is filed, there is a public record of the debt, and the judgment remains as a lien against the real property for 10 years. It can be renewed for another 10 years. However, placing a lien on real property is not always the best way to recover on a judgment. If you have done an asset search and identified personal property of value, such as vehicles or bank accounts or office equipment, it may be appropriate to seize personal property.
Before a sheriff can make a levy on personal property, the clerk of the court or the creditor's attorney must provide the sheriff with a property execution. A property execution on personal property tells the sheriff to satisfy the judgment out of the sale of specific assets belonging to the debtor.
If an execution on personal property is issued to a sheriff, certain details, such as the time of delivery, need to be recorded in order to protect the creditor's rights against other executions. Quite often, debtors owe multiple creditors. If two or more executions against the same debtor are delivered to the same sheriff, the executions are satisfied in the order in which they were delivered. If different sheriffs are given executions for the same debtor by two different creditors, the first officer to actually levy has priority.
In some cases, the sheriff may send an optional letter notifying the debtor that an execution has been issued against the debtor's property and letting the debtor know the assets are subject to levy and sale. Simply sending the letter is not a valid levy. If the debtor does not respond (or no letter is sent), the next step is the actual levy. The sheriff serves the execution and seizes the appropriate property to satisfy the money judgment. Two types of personal property are subject to levy: property that can be delivered and property that cannot be delivered.
There are several formal requirements for an execution under Article 52, Section 5230 of New York’s Civil Practice Law and Rules, for example, an execution must specify the date of the judgment, its amount, the amount due, and the names of the parties. The execution must direct that only property in which the named judgment debtor that is not deceased has an interest or debts that are owed to the named judgment debtor can be levied upon. Moreover, if the execution is issued for a bank account, the execution must state, among other things, that $2,500 of an account containing direct deposit or electronic payments that are statutorily exempt cannot be levied upon or restrained.Discuss Your Litigation Needs with a New York LawyerIf you are trying to collect a commercial debt and need to obtain an order for judgment on property, you should consult the experienced commercial litigation attorneys at Klapper & Fass. Based in New York, we help creditors pursue debts from our offices in White Plains and Manhattan. We serve the five boroughs of New York City, in addition to Orange, Nassau, Dutchess, Westchester, Suffolk, and Rockland Counties. Some of our clients also come from other states, such as Florida and Michigan. Contact our office at 914.287.6466 or via our online form to arrange an appointment.