N.Y. Civil Practice Law & Rules § 5222: Restraining notice

§ 5222. Restraining notice. (a) Issuance; on whom served; form;

service. A restraining notice may be issued by the clerk of the court or

the attorney for the judgment creditor as officer of the court, or by

the support collection unit designated by the appropriate social

services district. It may be served upon any person, except the employer

of a judgment debtor or obligor where the property sought to be

restrained consists of wages or salary due or to become due to the

judgment debtor or obligor. It shall be served personally in the same

manner as a summons or by registered or certified mail, return receipt

requested or if issued by the support collection unit, by regular mail,

or by electronic means as set forth in subdivision (g) of this section.

It shall specify all of the parties to the action, the date that the

judgment or order was entered, the court in which it was entered, the

amount of the judgment or order and the amount then due thereon, the

names of all parties in whose favor and against whom the judgment or

order was entered, it shall set forth subdivision (b) and shall state

that disobedience is punishable as a contempt of court, and it shall

contain an original signature or copy of the original signature of the

clerk of the court or attorney or the name of the support collection

unit which issued it. If the applicable interest rate changes pursuant

to section five thousand four of this chapter while a restraint is in

effect, the judgment creditor shall issue an amended restraining notice,

and include the date as of which the new interest rate applies, without

leave of court as required under subdivision (c) of this section.

Service of a restraining notice upon a department or agency of the state

or upon an institution under its direction shall be made by serving a

copy upon the head of the department, or the person designated by him or

her and upon the state department of audit and control at its office in

Albany; a restraining notice served upon a state board, commission, body

or agency which is not within any department of the state shall be made

by serving the restraining notice upon the state department of audit and

control at its office in Albany. Service at the office of a department

of the state in Albany may be made by the sheriff of any county by

registered or certified mail, return receipt requested, or if issued by

the support collection unit, by regular mail.

(b) Effect of restraint; prohibition of transfer; duration. A judgment

debtor or obligor served with a restraining notice is forbidden to make

or suffer any sale, assignment, transfer or interference with any

property in which he or she has an interest, except as set forth in

subdivisions (h) and (i) of this section, and except upon direction of

the sheriff or pursuant to an order of the court, until the judgment or

order is satisfied or vacated. A restraining notice served upon a person

other than the judgment debtor or obligor is effective only if, at the

time of service, he or she owes a debt to the judgment debtor or obligor

or he or she is in the possession or custody of property in which he or

she knows or has reason to believe the judgment debtor or obligor has an

interest, or if the judgment creditor or support collection unit has

stated in the notice that a specified debt is owed by the person served

to the judgment debtor or obligor or that the judgment debtor or obligor

has an interest in specified property in the possession or custody of

the person served. All property in which the judgment debtor or obligor

is known or believed to have an interest then in and thereafter coming

into the possession or custody of such a person, including any specified

in the notice, and all debts of such a person, including any specified

in the notice, then due and thereafter coming due to the judgment debtor

or obligor, shall be subject to the notice except as set forth in

subdivisions (h) and (i) of this section. Such a person is forbidden to

make or suffer any sale, assignment or transfer of, or any interference

with, any such property, or pay over or otherwise dispose of any such

debt, to any person other than the sheriff or the support collection

unit, except as set forth in subdivisions (h) and (i) of this section,

and except upon direction of the sheriff or pursuant to an order of the

court, until the expiration of one year after the notice is served upon

him or her, or until the judgment or order is satisfied or vacated,

whichever event first occurs. A judgment creditor or support collection

unit which has specified personal property or debt in a restraining

notice shall be liable to the owner of the property or the person to

whom the debt is owed, if other than the judgment debtor or obligor, for

any damages sustained by reason of the restraint. If a garnishee served

with a restraining notice withholds the payment of money belonging or

owed to the judgment debtor or obligor in an amount equal to twice the

amount due on the judgment or order, the restraining notice is not

effective as to other property or money.

(c) Subsequent notice. Leave of court is required to serve more than

one restraining notice upon the same person with respect to the same

judgment or order. A judgment creditor shall not serve more than two

restraining notices per year upon a natural person's banking institution

account. If the applicable interest rate changes pursuant to section

five thousand four of this chapter while a restraint is in effect, the

judgment creditor shall issue an amended restraining notice without

leave of court.

(d) Notice to judgment debtor or obligor. Except where the provisions

of section fifty-two hundred twenty-two-a of this article are

applicable, pursuant to subdivision (a) of such section, if a notice in

the form prescribed in subdivision (e) of this section has not been

given to the judgment debtor or obligor within a year before service of

a restraining notice, a copy of the restraining notice together with the

notice to judgment debtor or obligor shall be mailed by first class mail

or personally delivered to each judgment debtor or obligor who is a

natural person within four days of the service of the restraining

notice. Such notice shall be mailed to the defendant at his or her

residence address; or in the event such mailing is returned as

undeliverable by the post office, or if the residence address of the

defendant is unknown, then to the defendant in care of the place of

employment of the defendant if known, in an envelope bearing the legend

"personal and confidential" and not indicating on the outside thereof,

by the return address or otherwise, that the communication is from an

attorney or concerns a judgment or order; or if neither the residence

address nor the place of employment of the defendant is known then to

the defendant at any other known address.

(e) Content of notice. The notice required by subdivision (d) of this

section shall be in substantially the following form and may be included

in the restraining notice:

NOTICE TO JUDGMENT DEBTOR OR OBLIGOR

Money or property belonging to you may have been taken or held in

order to satisfy a judgment or order which has been entered against you.

Read this carefully.

YOU MAY BE ABLE TO GET YOUR MONEY BACK

State and federal laws prevent certain money or property from being

taken to satisfy judgments or orders. Such money or property is said to

be "exempt". The following is a partial list of money which may be

exempt:

1. Supplemental security income, (SSI);

2. Social security;

3. Public assistance (welfare);

4. Spousal support, maintenance (alimony) or child support;

5. Unemployment benefits;

6. Disability benefits;

7. Workers' compensation benefits;

8. Public or private pensions;

9. Veterans benefits;

10. Ninety percent of your wages or salary earned in the last sixty

days;

11. Twenty-five hundred dollars of any bank account containing

statutorily exempt payments that were deposited electronically or by

direct deposit within the last forty-five days, including, but not

limited to, your social security, supplemental security income, veterans

benefits, public assistance, workers' compensation, unemployment

insurance, public or private pensions, railroad retirement benefits,

black lung benefits, or child support payments;

12. Railroad retirement;

13. Black lung benefits; and

14. COVID-19 stimulus relief for individuals and families with

children.

If you think that any of your money that has been taken or held is

exempt, you must act promptly because the money may be applied to the

judgment or order. If you claim that any of your money that has been

taken or held is exempt, you may contact the person sending this notice.

Also, YOU MAY CONSULT AN ATTORNEY, INCLUDING ANY FREE LEGAL SERVICES

ORGANIZATION IF YOU QUALIFY. You can also go to court without an

attorney to get your money back. Bring this notice with you when you go.

You are allowed to try to prove to a judge that your money is exempt

from collection under New York civil practice law and rules, sections

fifty-two hundred twenty-two-a, fifty-two hundred thirty-nine and

fifty-two hundred forty. If you do not have a lawyer, the clerk of the

court may give you forms to help you prove your account contains exempt

money that the creditor cannot collect. The law (New York civil practice

law and rules, article four and sections fifty-two hundred thirty-nine

and fifty-two hundred forty) provides a procedure for determination of a

claim to an exemption.

(f) For the purposes of this section "order" shall mean an order

issued by a court of competent jurisdiction directing the payment of

support, alimony or maintenance upon which a "default" as defined in

paragraph seven of subdivision (a) of section fifty-two hundred

forty-one of this article has been established subject to the procedures

established for the determination of a "mistake of fact" for income

executions pursuant to subdivision (e) of section fifty-two hundred

forty-one of this article except that for the purposes of this section

only a default shall not be founded upon retroactive child support

obligations as defined in paragraph (a) of subdivision one of section

four hundred forty of the family court act and subdivision one of

section two hundred forty and paragraph b of subdivision nine of section

two hundred thirty-six of the domestic relations law.

(g) Restraining notice in the form of magnetic tape or other

electronic means. Where such person consents thereto in writing, a

restraining notice in the form of magnetic tape or other electronic

means, as defined in subdivision (f) of rule twenty-one hundred three of

this chapter, may be served upon a person other than the judgment debtor

or obligor. A restraining notice in such form shall contain all of the

information required to be specified in a restraining notice under

subdivision (a), except for the original signature or copy of the

original signature of the clerk or attorney who issued the restraining

notice. The provisions of this subdivision notwithstanding, the notice

required by subdivisions (d) and (e) shall be given to the judgment

debtor or obligor in the written form set forth therein.

(h) Effect of restraint on judgment debtor's banking institution

account into which statutorily exempt payments are made electronically

or by direct deposit. Notwithstanding the provisions of subdivision (b)

of this section, if direct deposit or electronic payments reasonably

identifiable as statutorily exempt payments as defined in paragraph two

of subdivision (l) of section fifty-two hundred five of this article

were made to the judgment debtor's account during the forty-five day

period preceding the date that the restraining notice was served on the

banking institution, then the banking institution shall not restrain two

thousand five hundred dollars in the judgment debtor's account. If the

account contains an amount equal to or less than two thousand five

hundred dollars, the account shall not be restrained and the restraining

notice shall be deemed void. Nothing in this subdivision shall be

construed to limit a banking institution's right or obligation to

restrain or remove such funds from the judgment debtor's account if

required by 42 U.S.C. § 659 or 38 U.S.C. § 5301 or by a court order.

Nothing in this subdivision shall alter the exempt status of funds that

are protected from execution, levy, attachment, garnishment or other

legal process, under section fifty-two hundred five of this article or

under any other provision of state or federal law, or affect the right

of a judgment debtor to claim such exemption.

(i) Effect of restraint on judgment debtor's banking institution

account. A restraining notice issued pursuant to this section shall not

apply to an amount equal to or less than the greater of two hundred

forty times the federal minimum hourly wage prescribed in the Fair Labor

Standards Act of 1938 or two hundred forty times the state minimum

hourly wage prescribed in section six hundred fifty-two of the labor law

as in effect at the time the earnings are payable (as published on the

websites of the United States department of labor and the state

department of labor) except such part thereof as a court determines to

be unnecessary for the reasonable requirements of the judgment debtor

and his or her dependents. This amount shall be equal to seventeen

hundred sixteen dollars on the effective date of this subdivision, and

shall rise to seventeen hundred forty dollars on July twenty-fourth, two

thousand nine, and shall rise thereafter in tandem with the minimum

wage. Nothing in this subdivision shall be construed to limit a banking

institution's right or obligation to restrain or remove such funds from

the judgment debtor's account if required by 42 U.S.C. § 659 or 38

U.S.C. § 5301 or by a court order. Where a judgment debtor's account

contains an amount equal to or less than ninety percent of the greater

of two hundred forty times the federal minimum hourly wage prescribed in

the Fair Labor Standards Act of 1938 or two hundred forty times the

state minimum hourly wage prescribed in section six hundred fifty-two of

the labor law as in effect at the time the earnings are payable (as

published on the websites of the United States department of labor and

the state department of labor), the account shall not be restrained and

the restraining notice shall be deemed void, except as to those funds

that a court determines to be unnecessary for the reasonable

requirements of the judgment debtor and his or her dependents. Nothing

in this subdivision shall alter the exempt status of funds which are

exempt from execution, levy, attachment or garnishment, under section

fifty-two hundred five of this article or under any other provision of

state or federal law, or the right of a judgment debtor to claim such

exemption.

(j) Fee for banking institution's costs in processing a restraining

notice for an account. In the event that a banking institution served

with a restraining notice cannot lawfully restrain a judgment debtor's

banking institution account, or a restraint is placed on the judgment

debtor's account in violation of any section of this chapter, the

banking institution shall charge no fee to the judgment debtor

regardless of any terms of agreement, or schedule of fees, or other

contract between the judgment debtor and the banking institution.

(k) The provisions of subdivisions (h), (i) and (j) of this section do

not apply when the state of New York, or any of its agencies or

municipal corporations is the judgment creditor, or if the debt enforced

is for child support, spousal support, maintenance or alimony, provided

that the restraining notice contains a legend at the top thereof, above

the caption, in sixteen point bold type with the following language:

"The judgment creditor is the state of New York, or any of its agencies

or municipal corporations, AND/OR the debt enforced is for child

support, spousal support, maintenance or alimony.".