A. Important Factors

JurisdictionNew York

A. Important Factors

1. Informal Proceedings

Perhaps the most important aspect of the post-judgment collection process involves the efforts necessary to obtain information about the financial situation of the judgment-debtors. In most cases, these efforts will be repeated many times during the life of a judgment (20 years pursuant to CPLR 211, unless extended). It is very common for your judgment to be one of many defaulted debts of the judgment-debtor. Common causes for these defaults can include recent sickness, job loss or divorce; the judgment-debtor may be experiencing a traumatic financial upheaval at this time. Nevertheless, if the judgment-debtor avoids a bankruptcy filing, it is usually the case that the judgment-debtor will be in a position to make payments on the judgment at some point in the future. When this happens, you should have procedures in place to discover the new financial information of the judgment-debtor.

This section deals with the formal post-judgment disclosure proceedings, but these efforts should also be combined with attempts to collect information from other public sources. For example, a proper Internet search can assist in obtaining asset and location information. A judgment permits a credit report to be acquired,173 and an attorney for the judgment-creditor is permitted under the Fair Credit Reporting Act to obtain a credit report 174; a debt collector can obtain a credit report to help collect a debt.175 A permissible purpose for a credit report can exist even after a bankruptcy discharge of the consumer, if there remains an in rem right to collect a debt against property (even if no right to collect against in personam against the consumer).176

As more courts and county clerks' offices allow for online searches, you can discover valuable information in public records, including pending court cases in which the judgment-debtor is a plaintiff, as well as deeds, mortgages, bankruptcies, and other judgments against the judgment-debtor.

Additionally, you may be directly contacted by the judgment-debtor in his or her attempt to resolve the judgment. During these discussions, you are permitted to verify information to assess the judgment-debtor's financial situation. The goal should be to resolve the judgment through voluntary payments in a sufficient and acceptable amount. Nevertheless, financial information should still be obtained as it may be needed in the event of default by the judgment-debtor.

2. Formal Proceedings—Scope of Statutory Authority

Pursuant to CPLR 5223, "[a]t any time before a judgment is satisfied or vacated, the judgment creditor may compel disclosure of all matter relevant to the satisfaction of the judgment, by serving upon any person a Subpoena, which shall specify all of the parties to the action, the date of the judgment, the court in which it was entered, the amount of the judgment and the amount then due thereon, and shall state that false swearing or failure to comply with the Subpoena is punishable as a contempt of court."

Courts have interpreted this section to permit liberal disclosure from judgment-debtors and third parties.

It is patent that, pursuant to CPLR 5223, "all matter relevant to the satisfaction of the judgment" is discoverable and "the public policy is to put no obstacle in the path" of those seeking to enforce a judgment. . . . Moreover, "[t]here is no public policy favoring the repeated assertion of unsustainable arguments, a pattern of delaying tactics designed to inflict extensive costs on the adversary, dishonesty or disingenuousness with the court . . . or contempt of court orders.177

CPLR 5223 provides broad authority to a judgment debtor seeking disclosure of information about a judgment creditor's assets. It allows a judgment debtor to serve a subpoena on any person seeking "all relevant information" (id.; see U.S. Bank Nat. Ass'n v. APP Intern. Fin. Co., 100 A.D.3d 179, 183 (1st Dep't 2012) ['all matter relevant to the satisfaction of the judgment is discoverable and the public policy is to put no obstacle in the path of those seeking to enforce a judgment']; see also Richard C. Reilly, Practice Commentaries McKinney's CPLR § 5223 stating "[I]t permits such disclosure to be sought from any person who may be in a position to reflect on the judgment debtor's property, including the judgment debtor and his family and friends. Any third person may also be compelled to make disclosure." Id.). CPLR 5224 permits this broad disclosure by three methods (1) deposition; (2) subpoena duces tecum; and (3) an information subpoena. Generally, under New York law, judgment creditors are entitled to broad disclosure in aid of judgment enforcement (ICD Group, Inc. v. Israel Foreign Trade Co. (USA) Inc., 224 A.D.2d 293 (1st Dep't 1996)).178

Broad post-judgment discovery in aid of execution 'is the norm in federal and New York...

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