Now You Have a Judgment, What Do You Do?
So you’ve gone through the trouble of getting a judgment against someone who owes you money for whatever reason: because you’ve loaned money that wasn’t repaid, because a poor job was done in constructing the addition on your home or because you were caused injury and there was no insurance to cover it. Your troubles are over right? Think again.
Getting the judgment is the easy part. Enforcing it and getting it paid is the hard part. Many people think that if they get a judgment in small claims or other court that the court personnel are available to help with enforcement or to help make sure that the judgment is paid. However, they are not.
Judgment enforcement in New York can take all sorts of forms: a judgment creditor can garnish wages, seizure personal and real property, and attempt to seize a bank account. If a judgment creditor doesn’t know what property someone might own, the law also gives the opportunity to conduct a deposition so that questions can be asked and answered about someone’s assets: what do you own? Where do you work? How much do you make? Do you own any real property other than your home? Where do you bank? Are you due to receive an inheritance?
After the stumbling block of trying to determine what assets someone might own, the next hurtle is to avoid the effect of exemptions, bankruptcy, and general insolvency. The law protects certain property even when someone is being pursued for amounts that they owe. For example, certain benefits cannot be garnished, such as unemployment, social security disability, pension payments, and workers’ compensation payments to name a few. In addition, depending on the deposits to a bank account, there are amounts that are exempt (anywhere from the first $1,740 to $2,500). One would think that having a judgment against someone’s home would be valuable but there is a $75,000 exemption available for one’s equity in a “homestead”. In these economic times it is unlikely that many people have more than $75,000 of equity in their home (this figure changes in different areas of New York State) after one considers mortgages and home equity lines of credit.
At the end of the day, sometimes the best thing that a judgment creditor can do is to make sure that a judgment is “transcripted” (filed) in the County Clerk’s Office in which person who owes the judgment lives. This serves as a lien on any real property and it also is a public record that is picked up by the credit reporting agencies. Down the road, when a person who owes you money needs to avail themselves of credit or sells property that was otherwise protected by exemptions, the judgment may be enough of a bother and obstacle that payment may finally be achieved.
There are though things that a judgment holder can do to help make sure he or she is paid….the message here is to be educated on how to best proceed. If you have any questions about judgments or their enforcement, contact Diane Tiveron at 716-636-7600.