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Collecting from a third party who owes money to your judgment debtor

by | Jan 28, 2021 | Civil Litigation, Judgments

As a judgment creditor with a money judgment in New York, you have options for collecting the money owed to you and satisfying the debt. If you know that a third party owes or will owe money to your judgment debtor, New York law provides for a “special proceeding” against that third party in which the court can order the third party to pay you the money that the third party owes to your judgment debtor, up to the amount necessary to satisfy your judgment.

After you are paid, the third party – also called the garnishee or respondent – will no longer owe that debt to their creditor (your judgment debtor).

Special proceeding

When you file the special proceeding, you must give official notice to your judgment debtor, who has the right to ask to intervene in the proceeding. Any other persons who believe they have an interest in the money in dispute may also request to intervene in the proceeding, and the court has the discretion to permit or block the judgment debtor and other parties from intervening in the proceeding.

If the third party’s debt to your judgment creditor is not yet due but will become due at some point in the future, the court may order that the third party pay you up to the amount needed to satisfy your judgment once the third party’s debt to your judgment creditor matures. Alternatively, the court may enter a judgment for you and against the third party for the amount of your original judgment.

If the third party does not dispute the debt they owe to your judgment debtor, the court will not order the respondent to cover your court costs.

These special proceedings can be confusing and require you to follow specific legal processes. An experienced attorney can answer questions about whether a special proceeding is a viable option for you and what you need in order to proceed.

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The Attorneys of Katz Melinger PLLC