Debt Collection Tips: Docketing a Judgment Lien

Posted on September 13, 2014 by Richard Klass

Once a Judgment has been entered in a court, there are various methods which may be utilized by the judgment creditor to collect the Judgment from the debtor.

Where the debtor owns real estate, a lien may be placed upon the property. This type of lien is referred to as a Judgment lien under Article 52 of the Civil Practice Law and Rules (CPLR).

The Judgment lien is placed upon real estate by the “docketing” of a Transcript of Judgment with the County Clerk’s Office. Once the Judgment is docketed or registered, the judgment creditor may issue an Execution to the Sheriff to levy and sell the real estate, or merely leave the lien against the property until the debtor sells or transfers the property (at which time, the Judgment will likely be paid from the proceeds at closing).

If the Judgment was obtained in the Supreme Court of the county in which the property is located, no further action is required to docket the lien.

If the Judgment was obtained in another court (such as the New York City Civil Court, federal court, Family Court, or District Court), that court will issue, for a fee, a Transcript of Judgment with a raised seal, which Transcript of Judgment will then be filed with the County Clerk’s Office, at which point the lien will be effective.

If the debtor owns real estate in a county different from the one in which the Judgment was entered, a Transcript of Judgment should issue from the County Clerk’s Office in which the Judgment was entered and be filed with the County Clerk’s Office in which the property is located to effectuate the lien.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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Getting Your Money: obtaining abandoned property

Posted on September 3, 2014 by Richard Klass

In various situations, New York State obtains abandoned property, which it holds in escrow until the rightful owner applies to release the property to it. This may arise from surplus moneys in mortgage foreclosure cases, deposits paid into court, or other statutory deposits.

The New York State Comptroller is in charge, by virtue of the Abandoned Property Law, of holding onto the funds or “abandoned property.” The Comptroller’s office maintains a list of all property it is holding, and makes the same available to the general public. By simply inputting one’s name into opens in a new windowthe Comptroller’s website, all records will be located.

However, sometimes the Comptroller’s search is not enough to locate all property to which a person may be entitled. An asset locator (a search firm engaged in this business) may locate other property to which a person may be entitled. One of the typical scenarios in which this occurs is:

In a mortgage foreclosure case, the real estate is sold at auction and a “surplus” is generated (which is the amount of money the real estate sold for above what the mortgagee/lender is entitled to). No party applies to the court for payment of the surplus moneys, and after five years, the local County Clerk pays the surplus moneys over to the State Comptroller as abandoned property.

In the above situation, the asset locator will help a party entitled to the surplus moneys (e.g., second mortgagee, judgment creditor, etc.) to locate the abandoned property, as it will not be held under its name.

Once the abandoned property is located, the Comptroller will issue a “Certificate of Deposit” and require that a Court Order be obtained for release of the property. A proceeding will need to be brought in the court in which the moneys were deposited for turnover of the surplus moneys deemed abandoned.

The proceeding, in which the court will order the turnover, must be conducted upon proper notice to all interested parties, along with notice to the Comptroller.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Executions

Posted on August 23, 2014 by Richard Klass

Once a Judgment has been obtained against a debtor, an ” Execution ” may issue to a Sheriff or Marshal. An Execution is a legal document which directs the Sheriff or Marshal to levy upon certain assets of the debtor.

There are three types of Executions:

Property Execution: issues against personal property of any nature belonging to the debtor, including bank accounts, cars, shares of stock, equipment, etc.
Real Property Execution: issues against real estate owned by the debtor, permitting the sale of the real estate at auction.
Income Execution: issues against a debtor’s wages, permitting the garnishment of the debtor’s salary or compensation.

Each county of New York State has a Sheriff, who performs the above functions. Within the City of New York, a City Marshal may be selected by the creditor in lieu of a Sheriff (except for real estate sales). Some creditors prefer using a City Marshal instead of a Sheriff because City Marshals are not City employees, but rather work strictly upon a percentage of the amount collected. The perception is that City Marshals have more incentive to work harder because of this fee structure.

According to statute, the Sheriff/Marshal is entitled to collect a levy fee and “poundage” of 5% from the debtor on top of the Judgment amount as a fee.

In some situations, the Sheriff cannot levy upon property, where there may be title issues relating to the ownership of the property, at which time further legal proceedings may be necessary.

by Richard A. Klass, Esq.

R. A. Klass
Your Court Street Lawyer

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The Importance of Saving Proof of Payment

Posted on August 13, 2014 by Richard Klass

In 1994, tax payments were made to the NYC Department of Finance for several parcels of real property by a client. In 2001, unbeknownst to the client, the Department of Finance unilaterally reversed the payments made, added interest, created tax liens, and bundled up the liens for public auction sale.

My firm commenced an action against the City of New York in 2002, after learning of the tax lien sales, to declare that the payments made in 1994 had truly been made, and that the Department of Finance acted without authority in reversing the credits. Luckily for the client, he saved the receipts issued by the Department of Finance when he made the payments in 1994 (which receipts are stamped onto the tax bills and actually given to the taxpayer).

The case culminated with the City of New York agreeing to reverse all of the unauthorized charges in 2001, reversing the tax lien sales, and clearing the tax delinquencies on the client’s account. A win!

What does this teach? The importance of retaining proof of payment in various situations. Here, proof of payment was crucial in winning the case.

Common proofs of payment include a check or credit card statement showing that the bill was paid. Other forms of proof may be a store receipt, credit card receipt, or paid invoice. If cash is tendered, a signed receipt should be obtained.

The general rule of thumb is that most business records should be maintained for safekeeping for seven years. Many advocate saving records for much longer, if feasible given space considerations.

The ability to prove payment of a debt or bill comes in handy in various situations, including:

Many parents pay the custodial parent their child support payments by cash. Sometimes, the custodial parent has kept poor records and will allege non-payment. The burden of proving payments will fall upon the person charged with making the support payments.
Distribution companies, such as food wholesalers, will have the drivers pick up payments at the time of making delivery of goods. The driver may not account for the payments and the store will be forced to show payment of the invoices.
Tenants of smaller rental buildings or two-family houses will pay the landlord (who generally lives at the building) by cash and fail to obtain a rent receipt. Afterwards, the landlord may commence an action for non-payment in the Housing Court and the tenant will be without proof of payment of the rent.

Since the general burden of proof of payment falls upon the person liable for the same, it is crucial that proof be obtained at the first instance and maintained. This will ensure that later mistakes or intentional denials of payment are disproved.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Issuance of the Summons in a Collection Case

Posted on August 3, 2014 by Richard Klass

A “Summons” is a legal document which notifies a person that he is being sued by another. The requirement of issuance of a Summons is a fundamental right derived from common law. There are specific rules relating to the methods of service of the Summons. In a collection case, however, there are additional rules to consider:

Venue
The venue of a case relates to the jurisdiction in which the case is brought within the State. Generally, the proper venue of a case is one in which either party resides or where the transaction took place. The venue of a case to collect upon a consumer credit transaction — one for which the purpose of the debt was for personal use, as opposed to commercial debt; many credit card cases fall into this category — must be in one of two places, either in the county in which the debtor resides or the county in which the transaction took place. Both New York State’s Civil Practice Law and Rules (CPLR) and the federal Fair Debt Collection Practices Act (FDCPA) require this rule. If a debtor applied for credit in Kings County and subsequently moved to Queens County, the Summons may be issued for either county.
Consumer Credit Transaction
According to the CPLR, the top of the Summons must state that the Summons is being issued for a consumer credit transaction.
Spanish Summons
In New York City, the Civil Court Act requires that, in addition to the Summons being issued in English, there must be an additional Summons issued in Spanish.

R. A. Klass
Your Court Street Lawyer

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