N.Y. Civil Practice Law & Rules § 5222-a: Service of notices and forms and procedure for claim of exemption

§ 5222-a. Service of notices and forms and procedure for claim of

exemption. (a) Applicability. Any person authorized under subdivision

(a) of section fifty-two hundred twenty-two of this article issuing a

restraining notice affecting a natural person's account at a banking

institution pursuant to such subdivision must comply with this section,

in addition to the general provisions set forth in such section. Any

sheriff levying against a natural person's account at a banking

institution pursuant to section fifty-two hundred thirty-two of this

article must comply with this section, in addition to the general

provisions set forth in section fifty-two hundred thirty-two of this

article. The procedures set forth in subdivisions (b), (c), (d), (e),

(f) and (g) of this section shall not apply where pursuant to

subdivision (h) and/or (i) of section fifty-two hundred twenty-two or

subdivision (e) of section fifty-two hundred thirty-two of this article,

no funds in the account are restrained or levied upon.

(b) Service of exemption notice and exemption claim form. 1. Service

with restraining notice upon banking institution. The person issuing the

restraining notice pursuant to subdivision (a) of section fifty-two

hundred twenty-two of this article shall provide the banking institution

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

exemption notice and two exemption claim forms with sections titled

"ADDRESS A" and "ADDRESS B" completed. The exemption notice and

exemption claim forms shall be in the forms set forth in paragraph four

of this subdivision. The notice and the forms shall be served on the

banking institution together with the restraining notice and copy of the

restraining notice. Service must be accomplished in accordance with

subdivision (a) or (g) of section fifty-two hundred twenty-two of this

article. Failure to serve the notice and forms together with the

restraining notice renders the restraining notice void, and the banking

institution shall not restrain the account.

2. Service of execution by levy upon a garnishee banking institution.

When serving an execution pursuant to subdivision (a) of section

fifty-two hundred thirty-two of this article, the sheriff shall provide

the banking institution with an exemption notice and two exemption claim

forms, which shall be in the forms set forth in paragraph four of this

subdivision. The sheriff shall serve both the exemption notice and the

exemption claim forms on the banking institution together with the

execution notice. Service must be accomplished in accordance with

subdivision (a) of section fifty-two hundred thirty-two of this article.

Failure to serve the notice and forms renders the execution void, and

the banking institution shall not levy upon the account.

3. Service upon judgment debtor. Within two business days after

receipt of the restraining notice or execution, exemption notice and

exemption claim forms, the banking institution shall serve upon the

judgment debtor the copy of the restraining notice, the exemption notice

and two exemption claim forms. The banking institution shall serve the

notice and forms by first class mail to the last known address of the

judgment debtor. The inadvertent failure by a depository institution to

provide the notice required by this subdivision shall not give rise to

liability on the part of the depository institution.

4. Content of exemption notice and exemption claim form. a. The

exemption notice shall be in the following form:

"EXEMPTION NOTICE as required by New York Law

YOUR BANK ACCOUNT IS RESTRAINED OR "FROZEN"

The attached Restraining Notice or notice of Levy by Execution has

been issued against your bank account. You are receiving this notice

because a creditor has obtained a money judgment against you, and one or

more of your bank accounts has been restrained to pay the judgment. A

money judgment is a court's decision that you owe money to a creditor.

You should be aware that FUTURE DEPOSITS into your account(s) might also

be restrained if you do not respond to this notice.

You may be able to "vacate" (remove) the judgment. If the judgment is

vacated, your bank account will be released. Consult an attorney

(including free legal services) or visit the court clerk for more

information about how to do this.

Under state and federal law, certain types of funds cannot be taken

from your bank account to pay a judgment. Such money is said to be

"exempt."

DOES YOUR BANK ACCOUNT CONTAIN ANY OF THE FOLLOWING TYPES OF FUNDS?

1. Social security;

2. Social security disability (SSD);

3. Supplemental security income (SSI);

4. Public assistance (welfare);

5. Income earned while receiving SSI or public assistance;

6. Veterans benefits;

7. Unemployment insurance;

8. Payments from pensions and retirement accounts;

9. Disability benefits;

10. Income earned in the last 60 days (90% of which is exempt);

11. Workers' compensation benefits;

12. Child support;

13. Spousal support or maintenance (alimony);

14. Railroad retirement;

15. Black lung benefits; and/or

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

children.

If YES, you can claim that your money is exempt and cannot be taken.

To make the claim, you must

(a) complete the EXEMPTION CLAIM FORM attached;

(b) deliver or mail the form to the bank with the restrained or

"frozen" account; and

(c) deliver or mail the form to the creditor or its attorney at the

address listed on the form.

You must send the forms within 20 DAYS of the postmarked date on the

envelope holding this notice. You may be able to get your account

released faster if you send to the creditor or its attorney written

proof that your money is exempt. Proof can include an award letter from

the government, an annual statement from your pension, pay stubs, copies

of checks, bank records showing the last two months of account activity,

or other papers showing that the money in your bank account is exempt.

If you send the creditor's attorney proof that the money in your account

is exempt, the attorney must release that money within seven days. You

do not need an attorney to make an exemption claim using the form."

b. The exemption claim form shall be in the following form:

NAME OF COURT, NAME OF COUNTY

-------------------------------------x

PLAINTIFF/PETITIONER/CLAIMANT INDEX NO.

V.

DEFENDANT/RESPONDENT EXEMPTION CLAIM FORM

-------------------------------------x

NAME AND ADDRESS OF JUDGMENT NAME AND ADDRESS OF FINANCIAL

CREDITOR OR ATTORNEY INSTITUTION

(To be completed by judgment (To be completed by judgment

creditor or attorney) creditor or attorney)

ADDRESS ADDRESS

A_____________________ B______________________

____________________ _____________________

Directions: To claim that some or all of the funds in your account are

exempt, complete both copies of this form, and make one copy for

yourself. Mail or deliver one form to ADDRESS A and one form to ADDRESS

B within twenty days of the date on the envelope holding this notice.

**If you have any documents, such as an award letter, an annual

statement from your pension, paystubs, copies of checks or bank records

showing the last two months of account activity, include copies of the

documents with this form. Your account may be released more quickly.

_________________________________________________________________________

I state that my account contains the following type(s) of funds (check

all that apply):

____Social security

____Social security disability (SSD)

____Supplemental security income (SSI)

____Public assistance

____Wages while receiving SSI or public assistance

____Veterans benefits

____Unemployment insurance

____Payments from pensions and retirement accounts

____Income earned in the last 60 days (90% of which is exempt)

____Child support

____Spousal support or maintenance (alimony)

____Workers' compensation

____Railroad retirement or black lung benefits

_____COVID-19 stimulus relief for individuals and families with children

____Other (describe exemption):_________________________________

I request that any correspondence to me regarding my claim be sent to

the following address:

_____________________________________________________________________

(FILL IN YOUR COMPLETE ADDRESS)

I certify under penalty of perjury that the statement above is true to

the best of my knowledge and belief.

_________________________________________________________________________

DATE SIGNATURE OF JUDGMENT DEBTOR

(c) Claim of exemption. 1. To claim an exemption pursuant to the

procedures in this section, the judgment debtor shall complete the

exemption claim forms, sign them under penalty of perjury, and serve

them within twenty days of the date postmarked on the correspondence

containing the notice and forms. The judgment debtor shall serve one

completed exemption claim form on the banking institution and the other

on the attorney for the judgment creditor. In the event that there is no

attorney for the judgment creditor, then the exemption claim form must

be served directly on the judgment creditor. The judgment debtor may

serve the exemption claim forms in person or by first-class mail.

2. Where the banking institution receives an exemption claim form, it

shall notify the judgment creditor forthwith of the date on which the

funds will be released pursuant to paragraph three of this subdivision.

3. The banking institution shall release all funds in the judgment

debtor's account eight days after the date postmarked on the envelope

containing the executed exemption claim form mailed to the banking

institution or the date of personal delivery of the executed exemption

claim form to the banking institution, and the restraint shall be deemed

void, except where the judgment creditor interposes an objection to the

exemption within that time.

4. Where the executed exemption claim form sent to the judgment

creditor is accompanied by information demonstrating that all funds in

the account are exempt, the judgment creditor shall, within seven days

of the postmark on the envelope containing the exemption claim form and

accompanying information, instruct the banking institution to release

the account, and the restraint shall be deemed void. Where the account

contains some funds from exempt sources, and other funds from unknown

sources, the judgment creditor shall apply the lowest intermediate

balance principle of accounting and, within seven days of the postmark

on the envelope containing the exemption claim form and accompanying

information, shall instruct the banking institution to release the

exempt money in the account. The provisions of paragraph two of

subdivision (b) of rule twenty-one hundred three of this chapter shall

not enlarge the judgment creditor's time to move pursuant to this

section. Information demonstrating that funds are exempt includes, but

is not limited to, originals or copies of benefit award letters, checks,

check stubs or any other document that discloses the source of the

judgment debtor's income, and bank records showing the last two months

of account activity. If the judgment creditor fails to act in accordance

with this subdivision, the judgment creditor shall be deemed to have

acted in bad faith and the judgment debtor may seek a court award of the

damages, costs, fees and penalties provided for in subdivision (g) of

this section.

5. If no claim of exemption is received by the banking institution

within twenty-five days after the notice and forms are mailed to the

judgment debtor, the funds remain subject to the restraining notice or

execution. Failure of the judgment debtor to deliver the executed

exemption claim form does not constitute a waiver of any right to an

exemption.

(d) Objection to exemption claim and request for hearing. A judgment

creditor may object to the claim of exemption by moving for an order

pursuant to section fifty-two hundred forty of this article. The

judgment creditor must serve the banking institution and the judgment

debtor with its motion papers within eight days after the date

postmarked on the envelope containing the executed exemption claim form

or the date of personal delivery of the executed exemption claim form to

the banking institution, and the provisions of paragraph one of

subdivision (b) of rule twenty-one hundred three of this chapter shall

not enlarge the judgment creditor's time to move pursuant to this

section. The judgment debtor shall be served at the address provided on

the exemption claim form. The affirmation or affidavit in support of the

motion shall demonstrate a reasonable belief that such judgment debtor's

account contains funds that are not exempt from execution and the amount

of such nonexempt funds. The executed exemption claim form shall be

attached to the affirmation or affidavit. The affirmation or affidavit

shall not be conclusory, but is required to show the factual basis upon

which the reasonable belief is based. The hearing to decide the motion

shall be noticed for seven days after service of the moving papers. The

executed exemption claim form shall be prima facie evidence at such

hearing that the funds in the account are exempt funds. The burden of

proof shall be upon the judgment creditor to establish the amount of

funds that are not exempt. The court shall, within five days of the

hearing, issue an order stating whether or not funds in the account are

exempt and ordering the appropriate relief. The judgment creditor or its

attorney must serve the order on the banking institution and the

judgment debtor no later than two business days after the court issues

the order.

(e) Duties of banking institution if objection is made to exemption

claim. Upon receipt of a written objection pursuant to subdivision (d)

of this section from the judgment creditor or its attorney within the

specified eight-day period, the banking institution shall retain the

funds claimed to be exempt for twenty-one days unless otherwise ordered

by the court. If the period of twenty-one days expires and the banking

institution has not been otherwise ordered by the court, the banking

institution shall release the funds to the judgment debtor.

(f) Release of funds. At any time during the procedure specified in

this section, the judgment debtor or the judgment creditor may, by a

writing dated after the service of the restraining notice, direct the

banking institution to release the funds in question to the other party.

Upon receipt of a release, the banking institution shall release the

funds as directed.

(g) Proceedings; bad faith claims. Where the judgment creditor objects

to a claim of exemption pursuant to subdivision (d) of this section and

the court finds that the judgment creditor disputed the claim of

exemption in bad faith, as provided in paragraph four of subdivision (c)

of this section, the judgment debtor shall be awarded costs, reasonable

attorney fees, actual damages and an amount not to exceed one thousand

dollars.

(h) Rights of judgment debtor. Nothing in this section shall in any

way restrict the rights and remedies otherwise available to a judgment

debtor, including but not limited to, rights to property exemptions

under federal and state law.

(i) The provisions 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.".