NEW YORK LAW PROTECTS JUDGMENT DEBTORS’ INCOME FROM COLLECTION
New York recently enacted the Exempt Income Protection Act, which protects certain types of judgment debtor income from restraint or execution. The Act amends the Civil Practice Law and Rules (“CPLR”) to, among other things:
- Exempt from the execution of a money judgment the first $2,500 in a judgment debtor’s bank account that contains certain directly or electronically deposited statutorily exempt payments. “Statutorily exempt payments” means any personal property exempt from application to the satisfaction of money judgment under any provision of state or federal law, such as payments from, among other things, social security, veterans administration benefits, public assistance and workers’ compensation.
- Amend the restraining notice form to make clear to judgment debtors that the funds described above are exempt from execution.
- Provide that a bank cannot restrain the first $2,500 in a judgment debtor’s bank account if it contains the exempt funds described above.
- Provide that an amount in a judgment debtor’s bank account equal to 240 times the minimum wage cannot be restrained except under certain circumstances.
- Provide that a bank cannot assess a fee to a judgment debtor if it is served with a restraining notice and the bank account cannot be lawfully restrained or it is restrained in violation of the CPLR.
- Establish procedures that judgment creditors, banks and judgment debtors must follow with respect to exempt funds.
The Act takes effect January 1, 2009. Please let us know if you would like a copy of Assembly Bill No. 8527-A or if you have any questions.
- Mike Tomkies and Charles Gall
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