Using Installment Payment Orders to Get Paid in NY Debt Collection Cases

Image of a gavel.Using an installment payment order for New York debt collection can be effective when your borrower avoids paying the debt by manipulating their salary or reaching the 25% limit of what legally can be garnished from wages in New York state.

Individuals can intentionally stall your efforts to collect. They may reduce their income, by working for less than their job pays — or for free — to purposely avoid income execution.

If the debtor’s wages fall below the minimum amount, income execution can’t come into effect, making it more difficult to garnish their wages. Or, even if the debtor earned a little more than the minimum for income execution, the amount deducted from their salary would be so low it would barely chip away at the debt.

Let’s say you have a big earner. Although they might have a lot of disposable income, you can only garnish up to 25% of their wages in New York State over collection matters. But since judgment creditors were already garnishing 25% of their salary, you still can’t collect by way of an income execution.

If the Debtor Is Able to ‘Game the System,’ How Will You Get Paid?

Fortunately, New York anticipates these scenarios. There are several ways to pursue debtors attempting to game the system to satisfy their judgments.

For judgment debtors who are or should be, New York state offers installment payment orders for debt collection. You can seek an installment payment order even if you are garnishing the judgment debtor’s salary. If you are able to prove that debtor should be paying more based on their earnings or that they’re unfairly manipulating their compensation, you should consider pursuing both an income execution and a motion for installment payment order in your New York Debt collection case.

In order to ask the court to grant an order, you — or your collection attorney — has to pass a high burden of proof. You need to build a case that proves the judgment debtor can afford to pay more. You are, in essence, using many of the post-judgment techniques allowed by New York state — including depositions of the judgment debtor and third parties, subpoenas to third-parties, requests for documents, and more. These are the documents you’ll need to gather to support your application for an installment payment order in your New York debt collection case.

Once the information is gathered, a motion can be made to the court with all of your collected evidence. The court may schedule a hearing so it can consider the information presented and decide if the debtor was trying to defeat enforcement of your judgment. The court will weigh testimony by the debtor, potential earnings, expenses as well as the needs of the judgment debtor and those he or she supports.

If you have met your burden of proof, illustrating that the judgment debtor can afford increased payments to you beyond the level of an income execution or is working “for peanuts,” the court can order the judgment debtor make payment installments to you by way of an installment payment order.

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