Do You Have a Judgment Against You?
If so, you are likely very worried about what the judgment-creditor is going to do to you to satisfy their judgment. For example, everyone knows that they might be faced with frozen bank accounts or wage garnishments (or “income execution,” as it is called in New York). But what amounts, if any, are protected in those scenarios? And what about special items of value that are near and dear to your heart?
A “judgment-creditor” is the person or company that sued you and obtained a monetary damages award, or “money-judgment,” against you. In New York State, the property that can be seized from you can be broken down into two basic categories:
- A present or future interest in any property that isn’t “exempt” (more on this later); and
- Debts owed to you, that are payable to you.
Focusing first on the first category above (i.e. “a present or future interest in any property that isn’t exempt”), we identify the types of property that creditors CAN go after, which includes the following items that have your name on them or are in your possession:
- Bank accounts with your name on them (including joint accounts),
- Real estate,
- Motor vehicles,
- Escrow accounts,
- Stocks (including any dividends),
- Present or future contract interests,
- Partnership interests,
- Interest in an executory negotiable letter of credit.
As you can see, the list is rather long and gives judgment-creditors a wide range of targets to go after for satisfaction of their money-judgment. If that list wasn’t long enough…there is more.
The second category is “debts owed to you, that are payable to you.” Regardless of whether the debt is being repaid from within New York or from outside of the state, a creditor (through the proper legal avenues) can snatch any current or future debt that you are expecting repayment on. For example, if you have contracted to give a small loan to a friend, family member, or colleague and they are due to repay you over the course of several months, technically the money coming your way can be seized by the judgment creditor and applied towards the balance of the money-judgment.
All that being said, New York State does seek to provide some shelter for judgment-debtors to avoid mass hysteria and chaos. For example, a judgment-creditor generally may not pursue you once you have filed bankruptcy. Additionally, outside of the bankruptcy context, many exemptions are afforded to you in order to provide you and your family with reasonable living requirements – regardless of money-judgment(s) entered against you.
General exemptions include:
- 90% of wages earned within the past sixty (60) days;
- Income (unless income is in excess of reasonable living requirements);
- 90% of trust income (i.e. annuities, IRA’s, insurance contracts);
- Security deposits for rent and utilities;
- Pay and bounty for members of the armed forces ; and
- 100% of child support payments awarded by a court.
There are also many statutory exemptions that cannot be touched by a creditor under any circumstances. Those include:
- Social Security income (SS), including retirement and disability benefits
- Supplemental Security Income (SSI) or child support,
- Veterans benefits,
- Public assistance,
- Workers’ compensation,
- Unemployment insurance,
- Public or private pensions including railroad retirement, and
- Black lung benefits.
There is also familial property exemptions that protect household objects and family members. Those include:
- Religious texts,
- Family books/pictures,
- Domestic animals,
- Most household goods,
- Jewelry (up to $1,000),
- One vehicle (up to $4,000 in value; if disabled up to $10,000, unless debt is for a family obligation),
- $1,000 cash if no homestead exemption claimed,
- Medical and dental records,
- Disability assistance animals,
- Right to accelerate life insurance policy, and
- Certain trust funds dedicated to college tuition
PLEASE NOTE: This blog entry lists many forms of property that are exempt from your judgment-creditor’s clutch – but it is still not and exhaustive list and there are further exemptions and protections provided to consumers in New York State. For example, the Exempt Income Protection Act (EIPA), The Homestead Exemption (protections from the sale of homes to satisfy debts), and the amounts and types of money that can be garnished from your income. These items are already discussed in further detail on our website or will be the focus of future blog entries.
However, if you need help now figuring out where you are vulnerable to a judgment-creditor’s collection attempts to satisfy a money-judgment, call the attorneys at Graham & Borgese today. Our law firm can help you analyze your situation and advise you of your rights and options, so you can rest assured.