Debt Collection Tips: Executions

Once a Judgment has been obtained against a debtor, an ” Execution ” may issue to a Sheriff or Marshal. An Execution is a legal document which directs the Sheriff or Marshal to levy upon certain assets of the debtor.

There are three types of Executions:

  1. Property Execution: issues against personal property of any nature belonging to the debtor, including bank accounts, cars, shares of stock, equipment, etc.
  2. Real Property Execution: issues against real estate owned by the debtor, permitting the sale of the real estate at auction.
  3. Income Execution: issues against a debtor’s wages, permitting the garnishment of the debtor’s salary or compensation.

Each county of New York State has a Sheriff, who performs the above functions. Within the City of New York, a City Marshal may be selected by the creditor in lieu of a Sheriff (except for real estate sales). Some creditors prefer using a City Marshal instead of a Sheriff because City Marshals are not City employees, but rather work strictly upon a percentage of the amount collected. The perception is that City Marshals have more incentive to work harder because of this fee structure.

According to statute, the Sheriff/Marshal is entitled to collect a levy fee and “poundage” of 5% from the debtor on top of the Judgment amount as a fee.

In some situations, the Sheriff cannot levy upon property, where there may be title issues relating to the ownership of the property, at which time further legal proceedings may be necessary.

by Richard A. Klass, Esq.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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The Importance of Saving Proof of Payment

In 1994, tax payments were made to the NYC Department of Finance for several parcels of real property by a client.  In 2001, unbeknownst to the client, the Department of Finance unilaterally reversed the payments made, added interest, created tax liens, and bundled up the liens for public auction sale.

My firm commenced an action against the City of New York in 2002, after learning of the tax lien sales, to declare that the payments made in 1994 had truly been made, and that the Department of Finance acted without authority in reversing the credits.  Luckily for the client, he saved the receipts issued by the Department of Finance when he made the payments in 1994 (which receipts are stamped onto the tax bills and actually given to the taxpayer).

The case culminated with the City of New York agreeing to reverse all of the unauthorized charges in 2001, reversing the tax lien sales, and clearing the tax delinquencies on the client’s account.  A win!

What does this teach?  The importance of retaining proof of payment in various situations.  Here, proof of payment was crucial in winning the case.

Common proofs of payment include a check or credit card statement showing that the bill was paid.  Other forms of proof may be a store receipt, credit card receipt, or paid invoice.  If cash is tendered, a signed receipt should be obtained.

The general rule of thumb is that most business records should be maintained for safekeeping for seven years.  Many advocate saving records for much longer, if feasible given space considerations.

The ability to prove payment of a debt or bill comes in handy in various situations, including:

  1. Many parents pay the custodial parent their child support payments by cash.  Sometimes, the custodial parent has kept poor records and will allege non-payment.  The burden of proving payments will fall upon the person charged with making the support payments.
  2. Distribution companies, such as food wholesalers, will have the drivers pick up payments at the time of making delivery of goods.  The driver may not account for the payments and the store will be forced to show payment of the invoices.
  3. Tenants of smaller rental buildings or two-family houses will pay the landlord (who generally lives at the building) by cash and fail to obtain a rent receipt.  Afterwards, the landlord may commence an action for non-payment in the Housing Court and the tenant will be without proof of payment of the rent.

Since the general burden of proof of payment falls upon the person liable for the same, it is crucial that proof be obtained at the first instance and maintained.  This will ensure that later mistakes or intentional denials of payment are disproved.

by Richard A. Klass, Esq.

———–
copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Issuance of the Summons in a Collection Case

A “Summons” is a legal document which notifies a person that he is being sued by another. The requirement of issuance of a Summons is a fundamental right derived from common law.  There are specific rules relating to the methods of service of the Summons.  In a collection case, however, there are additional rules to consider:

1.  Venue

The venue of a case relates to the jurisdiction in which the case is brought within the State.  Generally, the proper venue of a case is one in which either party resides or where the transaction took place.  The venue of a case to collect upon a consumer credit transaction — one for which the purpose of the debt was for personal use, as opposed to commercial debt; many credit card cases fall into this category — must be in one of two places, either in the county in which the debtor resides or the county in which the transaction took place.  Both New York State’s Civil Practice Law and Rules (CPLR) and the federal Fair Debt Collection Practices Act (FDCPA) require this rule.  If a debtor applied for credit in Kings County and subsequently moved to Queens County, the Summons may be issued for either county.

2.  Consumer Credit Transaction

According to the CPLR, the top of the Summons must state that the Summons is being issued for a consumer credit transaction.

3.  Spanish Summons

In New York City, the Civil Court Act requires that, in addition to the Summons being issued in English, there must be an additional Summons issued in Spanish.

R. A. Klass
Your Court Street Lawyer

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