Enforcing a New York money judgment: 10% of gross, and two bank restraints a year

New York gives judgment creditors an unusually powerful tool — a restraining notice the creditor's own attorney can issue, freezing property without a court order — and then constrains it with limits that exist almost nowhere else.

The two numbers that matter most are 10% and two.

The restraining notice, issued by the lawyer

CPLR 5222(a):

Issuance; on whom served; form; service. A restraining notice may be issued by the clerk of the court or the attorney for the judgment creditor as officer of the court, or by the support collection unit designated by the appropriate social services district. It may be served upon any person, except the employer of a judgment debtor or obligor where the property sought to be restrained consists of wages or salary due or to become due to the judgment debtor or obligor. It shall be served personally in the same manner as a summons or by registered or certified mail, return receipt requested … It shall specify all of the parties to the action, the date that the judgment or order was entered, the court in which it was entered, the amount of the judgment or order and the amount then due thereon, the names of all parties in whose favor and against whom the judgment or order was entered, it shall set forth subdivision (b) and shall state that disobedience is punishable as a contempt of court, and it shall contain an original signature or copy of the original signature of the clerk of the court or attorney or the name of the support collection unit which issued it.

Two things to isolate.

No court order is needed. The judgment creditor's attorney issues it "as officer of the court."

It cannot be served on an employer to reach wages. Wages go through an income execution under CPLR 5231 instead. A restraining notice served on an employer for wages is outside what subdivision (a) permits.

The form requirements in the last sentence are checkable, and they are not trivial: parties, entry date, court, amount of the judgment and the amount then due, the text of subdivision (b), and the contempt warning.

What it freezes, and for how long

CPLR 5222(b):

Effect of restraint; prohibition of transfer; duration. A judgment debtor or obligor served with a restraining notice is forbidden to make or suffer any sale, assignment, transfer or interference with any property in which he or she has an interest, except as set forth in subdivisions (h) and (i) of this section, and except upon direction of the sheriff or pursuant to an order of the court, until the judgment or order is satisfied or vacated. A restraining notice served upon a person other than the judgment debtor or obligor is effective only if, at the time of service, he or she owes a debt to the judgment debtor or obligor or he or she is in the possession or custody of property in which he or she knows or has reason to believe the judgment debtor or obligor has an interest …

And the duration, and the ceiling:

Such a person is forbidden to make or suffer any sale, assignment or transfer of, or any interference with, any such property … until the expiration of one year after the notice is served upon him or her, or until the judgment or order is satisfied or vacated, whichever event first occurs. … If a garnishee served with a restraining notice withholds the payment of money belonging or owed to the judgment debtor or obligor in an amount equal to twice the amount due on the judgment or order, the restraining notice is not effective as to other property or money.

Three points that matter to both sides:

• Against a third party, the restraint lasts one year from service, or until the judgment is satisfied or vacated.
• A third party is only bound if they actually owe a debt or hold property they know or have reason to believe the debtor has an interest in — or if the notice specifies it.
• The twice-the-judgment cap: once a garnishee has restrained twice the amount due, the notice is "not effective as to other property or money." A debtor with a frozen account should check this first, because over-restraint beyond that point is not authorised.

There is also a liability provision: a creditor that specifies property or a debt in the notice "shall be liable to the owner of the property or the person to whom the debt is owed, if other than the judgment debtor or obligor, for any damages sustained by reason of the restraint."

Two per year on a bank account

CPLR 5222(c):

Subsequent notice. Leave of court is required to serve more than one restraining notice upon the same person with respect to the same judgment or order. A judgment creditor shall not serve more than two restraining notices per year upon a natural person's banking institution account. If the applicable interest rate changes pursuant to section five thousand four of this chapter while a restraint is in effect, the judgment creditor shall issue an amended restraining notice without leave of court.

Two separate limits: leave of court for a second notice on the same person for the same judgment, and an absolute cap of two per year on a natural person's bank account.

Wages: the income execution

CPLR 5231(b) sets the levels, and New York's is lower than the federal ceiling:

Issuance. Where a judgment debtor is receiving or will receive money from any source, an income execution for installments therefrom of not more than ten percent thereof may be issued and delivered to the sheriff … provided, however, that (i) no amount shall be withheld from the judgment debtor's earnings pursuant to an income execution for any week unless the disposable earnings of the judgment debtor for that week exceed the greater of thirty times the federal minimum hourly wage prescribed in the Fair Labor Standards Act of 1938 or thirty times the state minimum hourly wage prescribed in section six hundred fifty-two of the labor law as in effect at the time the earnings are payable; (ii) the amount withheld from the judgment debtor's earnings pursuant to an income execution for any week shall not exceed twenty-five percent of the disposable earnings of the judgment debtor for that week, or, the amount by which the disposable earnings of the judgment debtor for that week exceed the greater of thirty times the federal minimum hourly wage … whichever is less …

That last one, (iv),: an income execution imposes nothing on a judgment "arising from a medical debt action brought by a hospital licensed under article twenty-eight of the public health law or a health care professional authorized under title eight of the education law."

Note also that New York uses the greater of the federal or state minimum wage for the floor, which in practice means the state figure.

The two-step service

CPLR 5231(d) requires the sheriff to come to the debtor first:

Service upon debtor; first service by sheriff. Within twenty days after an income execution is delivered to the sheriff, the sheriff shall serve a copy of it upon the judgment debtor, in the same manner as a summons or, in lieu thereof, by certified mail return receipt requested provided an additional copy is sent by regular mail to the debtor.

Only if that fails does the employer get involved. CPLR 5231(e):

Levy upon default or failure to serve debtor; second service by sheriff. If a judgment debtor fails to pay installments pursuant to an income execution served upon him or her for a period of twenty days, or if the sheriff is unable to serve an income execution upon the judgment debtor within twenty days after the execution is delivered to the sheriff, the sheriff shall levy upon the money that the judgment debtor is receiving or will receive by serving a copy of the income execution …

So a debtor served personally has twenty days to start paying voluntarily before the employer is served. That window is the practical reason to open the envelope.

The statutory notice on the form says it plainly:

AN INCOME EXECUTION FOR INSTALLMENTS FROM A JUDGMENT DEBTOR'S GROSS INCOME CANNOT EXCEED TEN PERCENT (10%) OF THE JUDGMENT DEBTOR'S GROSS INCOME.

How New York compares

A short checklist

If you are enforcing:

1. Use a restraining notice for accounts and property, an income execution for wages. A restraining notice cannot reach wages through the employer.
2. Get the form right — parties, entry date, court, judgment amount and amount then due, the text of 5222(b), and the contempt warning.
3. Count your restraining notices. Leave of court for a second on the same person; never more than two a year on a natural person's bank account.
4. Deliver the income execution to the sheriff, and expect the twenty-day debtor-service step first.
5. Do not specify property carelessly — specifying it exposes you to damages to a third-party owner.

If you are the debtor:

1. Check whether your account has been restrained beyond twice the amount due. Past that, the notice is not effective as to other money.
2. Use the twenty days after personal service of an income execution to pay voluntarily before your employer is served.
3. Check the arithmetic — 10% of gross, capped at 25% of disposable or the excess over the 30× floor, whichever is less.
4. If the judgment arises from a hospital or health-professional medical debt action, no income execution amount may be imposed.
5. Count the restraints on your bank account. More than two in a year is not permitted.

Where these rules live

• CPLR 5222 — Restraining notice
• CPLR 5230 — Execution
• CPLR 5231 — Income execution
• CPLR 5232 — Levy upon personal property
• CPLR 5240 — Modification or protective order; supervision of enforcement
• CPLR 5015 — Relief from judgment or order

This page explains what the statute says. It isn't legal advice, and the exemptions available under CPLR 5205 and the Exempt Income Protection Act provisions referred to in CPLR 5222(h) and (i) should be read directly.