Legal Question in Credit and Debt Law in New York

Re: recovering money due through small claims court

I assume the judgment is too small to gain the interest of collection attorneys. Here goes anyway. Step #1: You have to decide whether to leave the judgment as a lower court judgment or promote it to Supreme Court level. You want to promote the judgment if the defendant-debtor owns real estate, because a Supreme Court judgment is automatically a lien on all real estate in the county where the judgment is docketed. To docket a judgment, first, obtain a "transcript of judgment" from the clerk of the court where you won the judgment. Then deliver the transcript with the filing fee to the county clerk in the county where the lower court sits. The fees for the issuance of the transcript and filing it vary from county to county, but the basic rate is $0.50 to issue the transcript and $10 to file it. ONCE YOU HAVE THE JUDGMENT DOCKETED, ALL ENFORCEMENT PROCEEDINGS GO THE SHERIFF'S DEPARTMENT, NOT THE [CITY] MARSHAL. (2) If you are not going to promote the judgment, then you need to do a bit of detective work and start issuing restraining notices to banks (serve these with an information subopoena; the clerk of the court will sign the subpoenas for you, though, again, there is a fee for the service, so you might want to dragoon a lawyer with time on his hands to issue the subpoenas for you: just ask any slightly shabby storefront neighborhood lawyer--they are always hungry for paying business). You could even serve a subpoena on the debtor to come to the courthouse with his financial records and let you paw through them, though if he fails to appear, you'll need to cite him for contempt of court, and even a lawyer will tell you that contempt of court is never a cakewalk. Ultimately, in order to ensure that you can deduct the bad debt loss (assuming you pay taxes on an accrual basis) and even if you do not find assets, you have to issue an execution to the sheriff or marshal. Which the sheriff or marshal will return unsatisfied and usually without really making a concerted effort to find assets. He will then "return the execution unsatisfied," which satisfies the IRS rules about writing off bad debts.

Good luck.