It may have been almost 20 years since you sued and entered your New York debt collection judgment, but you haven’t collected any monies. Since the judgment is set to expire, can your New York judgment get an extension past the deadline?
New York State judgments are valid for 20 years. A judgment can act as a lien on real property for ten years which may be extended for an additional term if you to take affirmative action. Our prior article explaining how to extend your New York debt collection judgment lien details the steps needed to extend the lien period past the initial ten years afforded by the judgment.
But what happens when the judgment and lien expire?
The presumption in New York is the monies are paid, and judgment satisfied at the end of the 20-year period.
What if that’s not the case?
New York is generous in that state law provides two judgment extension options past 20 years.
Judgment Extension Option One
Using New York Civil Practice Law and Rules, section 211(b), you can seek an acknowledgment of the debt in writing by the named judgment debtor or payment towards the judgment — which may include property — either voluntarily paid by the judgment or by a representative of the debtor or by way of execution. Monies taken without the judgment debtor’s cooperation can go towards the indebtedness owed on account of the judgment.
What happens if the debtor has not acknowledged the debt in writing? Perhaps they have made themselves judgment-proof or you haven’t tried to collect the judgment. What happens then when the presumption is wrong and you haven’t been paid? Are you out of luck or can you extend the judgment?
Judgment Extension Option Two
You can bring a new action on the original judgment. It doesn’t matter whether or not payment occurred as long as the judgment debtor acknowledges it.
Proceeding under this section allows you to start a new case on the judgment provided the action occurs after the initial ten year lien period expires but before the 20-year judgment does.
If successful, the court will grant a “new” judgment based on the old judgment. You gain a new lien period of 10 years with the new judgment.
How Does This Apply in the Real World?
Take for example a creditor who sues a borrower. The borrower owns a home but does not have enough equity to sell it. The creditor sues the borrower in the state Supreme Court and obtains a judgment against the borrower, now a judgment debtor homeowner. The judgment debtor owns nothing other than his or her home.
Although the judgment creditor’s judgment became a lien for 10 years, they may have made an application (or not) to extend the lien for an additional 10 years.
Now that they are coming up on almost 20 years, the judgment creditor makes an application to renew the judgment based on option 2 above. The court grants the application and issues the judgment creditor a “new” judgment and a new lien period of 10 years. The lien attaches to the property. After 25 years — 20 years on the old judgment and five on the new one — the judgment debtor pays off their 25-year mortgage. The debtor now seeks to refinance or sell the property since they have equity.
At this point, the judgment appears in the title search as the debtor has to satisfy the lien on the property before they can sell or refinance. By extending the judgment, your judgment together with legal interest will be satisfied!
Have questions about a debt collection matter? Contact Frank, Frank, Goldstein and Nager for a consultation.