Many people assume that, once they win a judgment in a civil suit to collect a debt, this is the end of the matter. However, in many cases, people and businesses do not pay their debts even after a judgment is issued. This may be because they are simply not inclined to pay off the debt, or because they do not have the money to do so. To make sure your business does not suffer as a result of a debtor's recalcitrance, you can enlist a lawyer experienced in this process. At Klapper & Fass, our New York attorneys are knowledgeable in all aspects of commercial collections and can advise you on your options.Post-Judgment Collections
If a debtor refuses to pay after a judgment, what can you do to force payment? There are a number of legal mechanisms available to those trying to enforce judgments. One of the most commonly used mechanisms is wage garnishment, also known as income execution.
In an income execution, paperwork is delivered to the Sheriff of the county where the debtor lives, and the Sheriff serves it on the debtor. The debtor has 20 days within which to comply and make payments to the Sheriff, but if he or she fails to do so, the income execution must be served on the debtor's employer. This mechanism is only effective against a debtor who is employed and has income. Moreover, a debtor's earnings in New York are subject to one income execution at a time, except when an income execution is for child support, which has priority over a commercial debt.
Another option is attaching a debtor's checking account or savings account to obtain the money directly from the account. This is appropriate when a sole proprietor refuses to pay off a judgment, or when the individual responsible for a corporation's debts refuses to pay them. However, under the Exempt Income Protection Act of 2008, certain monies in bank accounts are protected so that the debtor has enough money to meet basic needs like rent and food.
Under CPLR § 5205, if statutorily exempt payments are made by direct deposit or electronically, a certain sum is exempt from being used to satisfy a money judgment. Sums exempt by statute may include those that are Social Security benefits, workers' compensation or disability benefits, railroad retirement benefits, pension payments, child support, unemployment benefits, and other public assistance.
Seizing large assets such as real property, equipment, or vehicles may also be possible. In some cases, a debtor fraudulently transfers an asset in order to avoid one of the above post-judgment collection remedies. For example, a debtor may give a large cash donation to a family member in order to make it look like they have no assets with which to pay a judgment. In such cases, litigation must be commenced anew against the judgment debtor.Explore Your Options with a Litigation Attorney in New York
Post-judgment enforcement is a challenging area of law that requires tenacity, and it may be important to retain an attorney who is familiar with many different methods of collections. The litigation lawyers at Klapper & Fass can help clients in New York and throughout the U.S. with pursuing the collection of a debt. We serve all five boroughs in New York City from our offices in Manhattan and White Plains. We also help clients in Westchester, Orange, Dutchess, Rockland, Nassau, and Suffolk Counties, as well as in other states like Texas and Florida. Contact our office at 914.287.6466 or via our online form.