From: Alden B. Smith, Co-Chair of the Debt Collection & Creditor's Rights Committee of the Rockland County Bar Association
A recent change was made to New York's income execution statute, CPLR 5231, to clarify the process of income execution service on judgment debtors residing within New York State. The statute first designates the initial service upon the judgment debtor residing within New York State as "first service". CPLR 5231(d). In case of default by the resident judgment debtor or failure to serve such resident judgment debtor, the subsequent service levying upon the money that such resident judgment debtor is receiving or will receive is designated "second service". CPLR 5231(e). The new legislation clarifies that "second service" shall be made upon a person or entity from whom the resident judgment debtor is receiving or will receive money.
The importance of these changes is to allow for "second service" of an income execution upon the person or entity from whom the judgment debtor is receiving or will receive money in any county in which the person or entity has an office or place of business.
Prior to the amendment, Section 5231 of the CPLR allowed for the initial service of a resident judgment debtor in the county in which they reside. However, in the event that the resident judgment debtor defaults after receiving the "first service" or the enforcement officer is unable to serve such resident judgment debtor with the "first service", the Sheriff or authorized enforcement officer (i.e., City Marshal) was only allowed to serve the "second service" personally within the county the person from whom such debtor is receiving or will receive money. The statute additionally required that service upon a non-resident judgment debtor be made by serving the debtor's New York employer in the county that the non-resident judgment debtor works.
The amendment to CPLR 5231 keeps intact the New York resident judgment debtor's ability to satisfy his or her obligation and directly pay installments outlined in the income execution. This is accomplished by "first service" of the income execution on the judgment debtor by the Sheriff or other authorized enforcement officer. In the event such judgment debtor does not fulfill this obligation within the 20 days prescribed under the statute, or the Sheriff is unable to serve the income execution on the judgment debtor, the new legislation now provides that the "second service" would be allowed by the enforcement officer now serving the defaulted income execution upon a person or entity from whom the judgment debtor is receiving or will receive money at any office or place of business of that person or entity. (emphasis added).
This change in the statute enhances the ability of the Sheriff or authorized enforcement officer to make "second service" at any of the offices of the debtor's employer notwithstanding where the debtor is actually employed.
This new "second service" provision has the effect of making the person or entity who owes money to the judgment debtor, and not the judgment debtor, the focus of who must be served by the enforcement officer. It no longer matters if that person or entity is served where the judgment debtor lives or works , as long as service is made on that person or entity under the methods now prescribed by the new statute. In the past, many employers have required that income executions be forwarded to a central office regardless of where the judgment debtor is employed.
As an example of how this new legislation works, I had a collection matter where the judgment debtor had a legal address in Orange County, New York and was employed by AT&T in Connecticut. After the judgment debtor was served with the "first service", he moved his legal address to Connecticut. When the City Marshal attempted to serve the "second service" of the income execution on the legal service of process address for AT&T in N.Y., AT&T informed the authorized enforcement officer (in this case, the City Marshal) that service of the income execution had to be served in Connecticut at one of its payroll offices because the judgment debtor is employed in Connecticut
This legislation has changed that practice engaged in by employers by allowing the enforcement officer to make "second service" at any of the offices of the debtor's employer notwithstanding where the debtor is actually employed. Prior to the amendment to the statute, I would have needed to engage the services of Connecticut legal counsel (I am not admitted to practice law in Connecticut) to domesticate the NY judgment in Connecticut. Not only would this have been at a great expense to my client to hire another attorney to do the work or to perform these extra legal steps, but it would have delayed the enforcement of the judgment for several months.
This new legislation still provides the judgment debtor the option to pay the installments due pursuant to the income execution without his or her employer being made aware of the debt, but it now will ensure that once this option has been exercised by the judgment debtor, there is a clean and efficient path for "second service" of an income execution on the person or entity who owes money to the judgment debtor.