You sued and won your New York debt collection case. The judgment issued in your favor allows you to lien the debtor’s real property. The following NY debt collection judgment lien created is valid for up to 10 years. But what happens after a decade is up? Does the lien your judgment creates expire or can you extend it?
Fortunately, because a judgment is valid for 20 years and can only act as a lien for 10 years, New York allows you to extend.
There are two ways for the holder or assignee of a valid NY debt collection judgment to extend the judgment as long as it has not been satisfied, settled, or paid in full. Which route you take will depend upon the underlying facts and circumstances of your situation.
Renew the judgment: New York Civil Practice Law and Rules (CPLR) 5014.
The first and most popular option in our NY debt collection practice is to renew the judgment. Renewing the judgment will extend your ability to use it as a lien on real property for an additional 10 years.
You can make the application by starting a separate action on the debt collection judgment. You will need to confirm to the court that:
- The judgment has not been satisfied, and;
- You are the original judgment creditor or have acquired the judgment by a valid assignment.
The application should be made a little bit short of a year before the lien expires. If you allow the lien to expire before “renewing” the judgment, there will be a gap during which your lien will not attach to the underlying property.
During this gap period, the judgment debtor can sell, transfer, or encumber the property.
In order to avoid a gap between the expiration of the initial 10 years and the effective time of renewal, the renewal should be brought at the beginning of the ninth year.
However, you can renew the judgment after the lien has expired. The creditor should make sure collection counsel understands that the initial 10 year lien period begins when the judgment is awarded. It does not begin when affirmative steps are taken to use the New York debt collection judgment as a lien.
Take for example a creditor who recovered a $250,000 judgment on January 1, 2018. Then they learned in January 2019 that the debtor owned property in Westhampton and immediately docketed the judgment with the Suffolk County Clerk. The 10 years starts on January 1, 2018. Not January 2019, when the New York debt collection was recorded as a lien against real property.
Using the wrong date can lead to a “gap” period during which time all equity in the house may be lost.
Extend the judgment: CPLR 5203 (b)
The second option is applicable if you were stayed from executing on the judgment during the 10-year lien period or if the Sheriff was going to execute against the property.
Under this scenario, you would extend the lien by making a motion to the court. The difference between proceeding in this manner as opposed to renewing the judgment is that you can only extend the lien for a shortened period of time. That would be the amount of time you were stayed from executing or the additional time needed for the sheriff to foreclose.
There are many tools available for debt collection in New York. Using your NY debt collection judgment as a lien and extending it is only one of them.
For experienced NY debt collection counsel contact FFGN. We have the experience that pays.