Judgments and Judgment Liens in New York: Your Complete Guide

A creditor who sues you for unpaid debt can get a judgment against you. With a judgment, creditors can garnish your wages or levy your bank account. They can take money directly from your paycheck or bank account. The creditor that won can also file a judgment lien against real property or personal property.

Judgments and judgment liens in New York are very powerful. Read on to learn about your rights as a judgment debtor.

What Is a Court Judgment?

A court judgment is a court or judge’s decision in a lawsuit. Once the court or judge reaches their decision, enforcement only happens after the judgment is entered. The court clerk signs and files the judgment to make it official.

In New York, judgments and legal procedures follow the Civil Practice Law and Rules (CPLR). Judgments are made, entered, and enforced according to New York’s CPLR.

In New York, a judgment can remain on your credit report for up to 10 years. New York civil practice law allows a money judgment to be enforced for up to 20 years. In certain circumstances, enforcement can last even longer. As a judgment debtor, your judgment creditor can attempt to collect the full amount plus interest for two decades.

Parties to a Court Judgment

The parties to a court judgment are the people or entities named in the civil court lawsuit.

Judgment Creditor

A judgment creditor is the winner of a lawsuit. In civil court, a judgment creditor is the person, company, or agency that the court decides has the legal right to recover money. They can recover from the other party or parties named in the lawsuit.

If you fall behind on your monthly payments, your creditor can sue you in state court. The statute of limitations is the amount of time a creditor has to file a lawsuit. If your creditor wins the suit, the court awards them a judgment. They become a judgment creditor. These are often original lenders or debt collectors that filed suit in the Supreme Court of New York. The supreme courts in New York are similar to district courts in other states.

Judgment Debtor

A judgment debtor is the party who didn’t win the lawsuit. In civil court, a judgment debtor is a person, company, or agency that must pay a debt. They must pay damages to the judgment creditor that won the lawsuit.

If your creditor sues you for not paying a debt and wins, they become your judgment creditor. You become the judgment debtor. Our partner Solo can help you respond to debt lawsuits before a judgment is entered.

What Types of Judgment Can Be Imposed in New York?

The standard procedure for NY courts is to reach a decision after conducting a full trial. In lieu of the court’s standard procedure, the following judgments may also be imposed.

Default Judgments

If a plaintiff brings a lawsuit and the defendant doesn’t answer the suit, trouble follows. If the defendant doesn’t make any type of motion within the time given, the plaintiff can ask for a default judgment.

When the defendant doesn’t respond to explain their side of the story, the court may give the plaintiff what they asked for. In lawsuits for nonpayment of debt, the plaintiff creditor gets the right to collect the money claimed. The judgment typically includes the debt, interest, and court costs. A hefty default judgment often gets entered against the defendant who fell behind on payments.

Judgment creditors with a default judgment have the right to garnish wages. They can levy the judgment debtor’s bank account and take money directly.

Summary Judgments

A summary judgment is the rarest type of judgment. A summary judgment happens when the court finds in favor of one party before the case goes to full trial.

The plaintiff or the defendant can motion the court for summary judgment. The court can only grant it when there is no genuine dispute of material fact. In the vast majority of cases, facts are in dispute. Generally, juries serve as the triers of fact during a trial. Because most cases have facts in dispute, summary judgments are rarely awarded.

Money Judgments

Any judgment that involves payment of a sum of money is a money judgment. Money judgments typically include the debt itself, interest accruing on the debt, court costs, and attorney fees. Most states award court costs to the winner. If the contract stipulates that the creditor can get attorney’s fees, they will be included.

What Is a Judgment Lien?

A lien is a claim or legal right placed on property to secure payment of a debt. For example, a car loan is a secured debt that places a lien on the vehicle title. If you default on your car loan payments, the lender can repossess the vehicle because of the lien.

A judgment lien is a lien that attaches to property owned by the judgment debtor. It results from a court judgment.

In New York, a judgment lien can be placed on real property or personal property. Real property is real estate, such as your house, condo, or other land. A judgment creditor can place a judgment lien against your home. When sold, proceeds from the sale of your property may be seized. The money goes to your creditor to satisfy the judgment.

Personal property is movable property beyond land and real estate. In New York, a judgment lien can be placed on your personal property. Items like your car, boat, jewelry, art, or other valuable assets can have liens attached. In some states, judgment liens can only be placed on real property.

Judgment creditors can discover the location of assets by filing an information subpoena. These subpoenas can be served on a judgment debtor or any person or corporation. The creditor serves anyone they believe has knowledge of the judgment debtor’s assets.

Length and Limitations of Judgment Liens

To get a judgment lien, the judgment creditor must file a judgment transcript with the county clerk. They file in the county where the judgment debtor’s property is located. An original judgment lien is valid for 10 years. If the judgment isn’t paid by the end of 10 years, the judgment creditor can seek a renewal judgment. The renewed lien would be valid for another 10 years.

In New York, creditors can attempt to collect on judgments for up to 20 years total. Under certain circumstances, a judgment lien can remain in effect for longer than 20 years.

Federal law provides for judgments from one state to be enforceable in another state. Enforcement depends on where the judgment creditor lives or where their property is located. In certain situations, foreign judgments can be enforced in New York. Foreign judgments are judgments from other states.

Judgment liens are subject to exemptions, which protect up to a certain amount of assets. For example, the debtor’s primary residence is protected from creditors, including judgment liens, under the homestead exemption.

How to Respond to Debt Lawsuits in New York

If you’ve been served with a summons, you need to act fast. You have a limited time to respond to the lawsuit. Failing to respond leads to a default judgment against you.

Our partner Solo helps New York residents respond to debt collection lawsuits. You can answer the summons, challenge the debt, and negotiate a settlement. Don’t let a default judgment ruin your financial future.

You have options even after a judgment is entered. You may be able to negotiate a payment plan or settle for less. You can also challenge the judgment if you have valid legal grounds.

Protecting Your Assets From Judgment Liens

Understanding exemptions is crucial for protecting your assets. New York provides exemptions that shield certain property from judgment creditors. The homestead exemption protects a portion of your primary residence equity. Personal property exemptions protect essential items like clothing, household goods, and tools of your trade.

If you’re facing a judgment lien, you need to understand what property is protected. Consult with a legal professional who understands New York exemption laws. They can help you maximize your protections under state law.

Bankruptcy may also be an option for dealing with judgment liens. Filing bankruptcy can stop collection actions and potentially eliminate judgment liens in some cases. Speak with a bankruptcy attorney to explore your options.