Statutes relating to the enforcement of money judgments require careful reading and analysis.
The below summarizes CPLR § 5208 [Enforcement after death of judgment debtor; leave of court; extension of lien].
In New York, the death of a judgment debtor triggers surrogate jurisdiction over the debtor's assets unless:
- An execution has already been issued on a properly docketed judgment lien against real property or
- A "levy" to take personal property is already in process.
Following death, any judgment-related activity falling short of the above will be stayed until a personal representative is appointed over the debtor's estate. If no such representative is sought within 18 months, the judgment creditor may seek permission from the underlying court to take further steps to enforce the judgment.
But a judgment lien already existing against the decedent's real property will remain a judgment until the later of 1) two years after death or 2) ten years after the filing of the judgment roll.
Stated another way:
- After someone dies, their debts cannot be collected from their property or money owed to them without permission from the court handling their estate (the money and property they left behind).
- If the court hasn't granted permission within 18 months after the person's death, the creditor (the person or company owed money) can ask another court to collect the debt.
- Any claim on the property of the person who died (judgment lien) will end either two years after they die or ten years after the court officially recorded the debt, whichever is later.
- These rules can be different if another law says so.
The policy behind this statute is to protect the debtor's estate, protect other creditors by investigating lien priority (for example, funeral expenses and tax debt are higher priority liens), and ensure fair play.
Three Main Takeaways of CPLR § 5208:
- Court Permission is Essential: After a debtor's death, the court overseeing the estate must authorize any debt collection efforts. If no personal representative is appointed within 18 months, the creditor can seek permission from another court.
- Respect for Lien Priorities: The statute aims to protect the debtor's estate and other creditors by investigating lien priorities, ensuring that higher-priority debts like funeral expenses and tax debts are addressed first.
- Seek Professional Help: If you are dealing with frozen bank accounts or wage garnishments, it is crucial to seek professional legal assistance. Submit our intake form for personalized help.
Summary of Commentary by Richard C. Reilly on N.Y. C.P.L.R. 5208. Commentary refers to a written analysis or explanation of a legal text, such as statutes, regulations, or case law:
Enforcement after Death of Judgment Debtor:
- Special rules apply when the judgment debtor dies before satisfaction of the judgment.
- Different outcomes depend on the type of property involved and whether the judgment became a lien before death.
- Confusion and disagreement exist among judges regarding these rules.
Real Property:
If execution is issued and levied before the debtor's death, the levy can be perfected after death.
If the judgment becomes a lien before death, but execution isn't issued, leave from the surrogate's court is needed to levy on real property.
Purpose of requiring leave is to ensure protection of the estate and prioritize debts.
In Oysterman's Bank & Trust Co. v. Weeks (35 A.D.2d 580, 313 N.Y.S.2d 535 [2d Dept. 1970]), it was held that levy and sale can proceed without leave of the surrogate if execution was issued before death and real property was duly lenied.
Personal Property:
- Different and complex issues arise with personal property priorities.
- Execution results in a lien on personal property upon delivery, but death of the debtor before levy cancels the lien.
- Leave from the surrogate is required for levy on personal property.
Purpose of Requiring Leave:
- Various reasons for requiring leave include considering other assets, sentimental value, or personal circumstances.
- Surrogate can permit or restrain levy based on circumstances presented.
Timeframe and Extensions:
- 18 months after death is given to appoint a personal representative; after this, leave can be obtained from the court.
- Real property lien period is extended to two years if less than two years remain at the debtor's death to compensate for enforcement delay.
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