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  1. #1

    Default What to Do if a Bank Obstructs Judgment Collection

    My question involves court procedures for the state of: NEW YORK

    Hello forum, thank you!!

    After keeping tabs on my Debtor's account for 2 months and determining the time was right, I moved forward with a Property Execution to seize her bank account. I know, upon reasonable information and belief, that she did NOT meet any of the statutory exemptions. I received back from the bank a response that said simply "no funds".I believe that either the bank (a) disregarded the notice for whatever reason in interest of their customer, or (b) they gave the Debtor notice of the seizure without freezing the funds first , allowing her to withdrawal the funds.

    The next step I believe should be an information subpoena regarding their handling of the matter, to verify they followed the law.

    Q: What section of law specifically handles the handling of a freeze on assets and the procedure an entity must follow?

    Q: If found in violation of law, what can i expect for compensation and remedy and what is the correct legal procedure ? contempt, or a second suit?

    Q: any suggestions on how to best question the bank on how they handled it, i.e., did they give the debtor noitce prior to freezing the account? when did they freeze it, wear there any large withdrawals at the time of service, etc.

    thank you so much. this person screwed me over so bad, and the judgment doesnt even come close to compensation. please help me collect!

  2. #2
    Join Date
    Mar 2013
    Posts
    18,175

    Default Re: What to Do if a Bank Obstructs Judgment Collection

    I'm guessing this is related to the tenant problem you wrote about in June:

    https://www.expertlaw.com/forums/sho...ht=#post955816

    After keeping tabs on my Debtor's account for 2 months
    How did you do that? I had my own methods decades ago (pre-internet), just curious as to how you did it.

    I believe that either the bank (a) disregarded the notice for whatever reason in interest of their customer, or (b) they gave the Debtor notice of the seizure without freezing the funds first , allowing her to withdrawal the funds.
    I find it hard to believe that a bank would take that kind of risk when it likely has procedures in place to deal with all bank levies. She may have just gotten lucky and took all the money out at the last minute. Or there could be another reason which I will touch on shortly.

    Q: What section of law specifically handles the handling of a freeze on assets and the procedure an entity must follow?
    I started with the statute section on Enforcement of Money Judgments. You don't have to read the whole thing yet. Just follow along with me as I address what I think are the appropriate sections:

    http://law.justia.com/codes/new-york...vp/article-52/

    Section 5222 explains the process of filing and serving the "restraining notice" on the bank:

    http://law.justia.com/codes/new-york...ticle-52/5222/

    Scroll down to Paragraph (h) Effect of restraint on judgment debtor's banking institution. Could it be possible that you got the "no funds" notice because of direct deposit of exempt earnings in the prior 45 days and the account had less than $2500 so there were "no funds" that could be attached?

    Paragraph (I) also discusses earnings.

    Section 5202 discusses exemptions:

    http://law.justia.com/codes/new-york...ticle-52/5205/

    Section 5225 discusses what the bank must do if there is attachable money in the account.

    http://law.justia.com/codes/new-york...ticle-52/5225/

    And, lastly, Section 5351 addresses the penalties for disobedience of the restraining notice.

    http://law.justia.com/codes/new-york...ticle-52/5251/

    Q: If found in violation of law, what can i expect for compensation and remedy and what is the correct legal procedure ? contempt, or a second suit?
    Beats me. The penalty is based on contempt of court. That's up to the judge, assuming that you can prove to the judge that somebody at the bank intentionally disobeyed the restraining notice.

    Q: any suggestions on how to best question the bank on how they handled it, i.e., did they give the debtor noitce prior to freezing the account? when did they freeze it, wear there any large withdrawals at the time of service, etc.
    No idea on that either. Assuming you can locate the person who sent back the "no funds" notice you are free to ask those questions just as you have asked them here. Expect to get stonewalled.

    I have a feeling that you are in line for membership in our "Landlords With Uncollectable Judgments Club." I became a member a long time ago, having accumulated several over a period of 20 years with 3 rental houses.

    Good luck.

  3. #3

    Default Re: What to Do if a Bank Obstructs Judgment Collection

    thanks alot. i may have missed something pretty important. as far as checking on funds, call any bank with a parties bank account number, claim you have a check for x amount of dollars and want to know if its a good check. they will tell you. its not an exact science, but its something.

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