NY Judgement Recovery Laws

As a condition of obtaining a valid judgment in NY, creditors must provide debtors with notice of filing suit, and thereafter, debtors must be allowed an opportunity to be heard before the court may issue a judgment. After notice, argument, and decision, a court may sign an order establishing it's judgment of liability. For creditors, obtaining a judgment is merely the first step when attempting to collect unpaid debts. A subsequent bankruptcy filing nevertheless discharges most general unsecured debts in Chapter 7. Upon filing bankruptcy, the automatic stay prevents collection even after a judgment is entered.

NY Judgement Recovery Laws Regarding Collection

A court judgement establishes a public record of liability in favor of a judgment creditor. However, a judgment of liability does little to ensure collection. The collection process, based upon NY judgement recovery laws, may not include execution upon any exempt assets owned by a debtor (except when secured by a valid lien) as determined by NY State exemption statues. All valid NY judgments bear interest from the date issued.  NY Civil. Practice Law & Remedy Code, Section 5003. The interest rate shall be at 9% per year, except where otherwise indicated by provided by NY Civil. Practice Law & Remedy Code, Section 5004. However, Chapter 13 bankruptcy rules prevent accrual of interest at the NY State rate after filing, yet permit interest in bankruptcy according to federal rules.

The US Bankruptcy Code generously incorporates New York State statutory laws into the administration of Chapter 7 liquidation, Chapter 13 plans, and Chapter 11 reorganization cases. The application of State Law in Federal Court is essential for resolving legal issues pertaining to the ownership of property, debtor and creditor rights, employment law and employee rights, enforcement of judgments, determinations of liability, family obligations, and many more individual rights when dealing with large corporations. Each year, as the State Legislature in Albany enacts new statutes, or amends existing statutes, the ripple effect impacts all New York citizens' rights in Federal Bankruptcy Court.

Changes in New York State statutory law affect the administration of bankruptcy cases and determination of assets subject to forfeiture and dischargeability of debts. Notice the following recent changes in bankruptcy procedures:

• Settled human rights cases in New York are considered assets of the estate.
• Palimony laws in NY are distinguished from alimony and child support.
• New York State toy gun law creates vicarious liability for parents.
• Grand larceny third degree NY law definitions are expanded by recent court decisions.
• New York State retainage law violations may create criminal liability.
• New York State human rights settlements, when received, are treated as cash.
• New York compensation fees for lawyers, if contingent, may be deducted from bankruptcy court values.
• Separation laws in New York State are enforceable in Bankruptcy court according to contractual variations agreed to by the parties..
• New York State human rights cases, while pending, may be protected as an exempt asset in Bankruptcy cases under both Chapter 7 and Chapter 13.

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