How do you get paid when you’ve won your New York debt collection case and have a money judgment? One way could be through a NYC marshal’s sale.
Your debt collection lawyer may recommend involving the marshal to help collect. The marshal gets involved after the issuance of a property execution. The city marshal will levy the debtor’s commercial property, bank accounts, and other assets.
Read on to understand the mechanics of the sale and how to satisfy your judgment.
Posing Notice of Sale
The marshal’s sale begins with the issuance of a property execution by the creditor’s attorney with instructions to levy at the judgment debtor’s place of business.
Once the marshal receives the execution with the requisite fee, they travel to the debtor’s place of business to conduct a “levy.” At that time, the marshal posts a notice of sale and takes an inventory of the debtor’s assets.
Between the time of levy and the sale date, the debtor often contacts the marshal’s office to arrange payment of the judgment and marshal fees. Assuming the debtor makes payments as promised, the marshal will postpone the sale and ultimately cancel it once the debtor satisfies the judgment or settlement.
When Is a Sale Appropriate?
The marshal may recommend a sale if they can’t collect the judgment through other means, the debtor does not pay or make arrangements to pay, and there are sufficient assets to satisfy part or all of the judgment.
The marshal will contact the attorney for the judgment creditor to confirm whether they want to go forward with a sale. Assuming that the judgment creditor wants to proceed, the judgment creditor’s attorney must run a UCC search and tax search.
The creditor’s attorney must reach out and make contact if there is a secured lender and/or tax lien. The secured lender has a right to foreclose on the assets. If there are tax liens, the marshal would need to notify the tax authority for permission to proceed with the sale. Any monies collected at a sale would first go to the taxing authority to satisfy the prior lien.
Getting Ready for the Sale
Before or at the time of sale, the sale is advertised in the New York Times. The creditor should attend the sale and expect to bid for the inventory at or near the amount of the judgment. If there is a lot of inventory to sell, the marshal would bring in an auctioneer or sell the inventory on their own. Items are typically sold as a bulk sale or in lots, whichever brings in more money.
Buyers will make arrangements with the landlord to remove the items once the sale is complete. Any monies collected above and beyond the judgment are turned over to the judgment debtor.
Would a Marshal’s Sale Satisfy Your Judgment?
As with all aspects of debt collection, a decision must be made on a case-by-case basis guided by your debt collection lawyer.
You will need to consider whether proceeding with a marshal’s sale makes economic sense. To do this, you’ll need to consider what inventory the debtor has on hand, whether there is a secured lender, tax liens, the amount of your judgment, and the additional costs involved.
Do you have questions about New York Debt collection or a possible claim? Email Frank, Frank, Goldsetin & Nager or call 212-686-0100 ext 12. You can find more New York debt collection tips and information on our blog or by subscribing to our YouTube channel
