Debt Collection Tips: Docketing the Judgment

Once the creditor has obtained a Judgment from a court, the collection process has now begun.  In the context of collecting the money due on the Judgment, it may be necessary to “docket” the Judgment in the County Clerk’s Office.

In each county of the State, there is a court of general jurisdiction called the “Supreme Court.”  In some counties, towns, cities, and villages, there are lower courts (such as Civil Court, District Court, etc.).  Judgments entered in those courts are not automatic liens upon any realty that the debtor may own in the county.  Rather, a “Transcript of Judgment” must be obtained from the court and filed with the County Clerk to create the lien.  Once docketed, the Transcript of Judgment will serve as notice to others that there is a lien upon any realty owned by the debtor; other parties are now aware that the lien must be paid according to its priority.

Judgments entered in a Supreme Court case are automatically docketed with the County Clerk.

Unlike New Jersey or some other states, which have state-wide recognition, the Judgment must be docketed by the filing of a Transcript of Judgment in each county in which the debtor has realty in order to create the lien.

The docketing of a Judgment is also essential when attempting to issue an Income Execution to a County Sheriff in another county (where, perhaps, the employer of a debtor is located).  Another purpose of docketing a Judgment may be where the Judgment was entered in federal District Court and the creditor wants to use a Sheriff instead of a United States Marshall.

by Richard A. Klass, Esq.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Docketing a Judgment Lien

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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Debt Collection Tips: Executions

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:

  1. Property Execution: issues against personal property of any nature belonging to the debtor, including bank accounts, cars, shares of stock, equipment, etc.
  2. Real Property Execution: issues against real estate owned by the debtor, permitting the sale of the real estate at auction.
  3. 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.

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

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:

  1. 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.

  2. 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.

  3. 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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Debt Collection Tips: identify the proper party.

One of the most important steps in the debt collection process is determining the proper party to sue.

In the case of an individual, the creditor must take great strides to ensure that the individual debtor’s name is properly spelled, along with the debtor’s street address and social security number.

In the case of a corporation, partnership or limited liability company, the exact legal name should be obtained. The legal status of a debtor may be confirmed through the Secretary of State’s office. The creditor may also want to run a business credit report, such as a Dun and Bradstreet or Equifax report.

Where a creditor has obtained a personal guarantee of a corporate debt from an individual, it is equally critical that all the same information is obtained for that person.

The identity of a potential debtor should be verified immediately upon consideration of extending credit. Many businesses’ credit departments are lax in having account applications signed and reviewed. This first encounter with a debtor is the right time to verify the debtor’s status.

Gathering as much information as possible about a debtor will assist in collecting debt from the debtor. At every stage, from pre-suit negotiation to institution of litigation to enforcement of judgment, the exact legal name of the debtor will prove valuable to collection. Liens, credit bureau reports, and attachments of property will prove successful if accurate information is provided.

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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