Once an execution is sent to a city marshal, fees on any monetary recovery are owed to the marshal. A question that comes up often in our debt collection practice is: What are marshal fees, and who pays them?
When you think of the word “execution,” you might imagine an executioner with a guillotine. but it means something different when it comes to debt collection.
Types of Marshal Fees
A collection attorney can issue an execution to a city marshal when they need help enforcing a judgment. The execution can take two forms: a property execution or an income execution. Regardless of the type, the marshal serves as an agent to collect the creditor’s judgment.
When issuing an execution to the city marshal, a minimum fee must be paid. For a property execution, the fees depend on where you want the Marshal to levy. For an income execution, the upfront fee depends on whether you want the marshal to serve the first and second stages, and the judgment debtor’s employment status.
Regardless of the type, these upfront fees are relatively small, ranging from $55 to $125. The fees cover the marshal’s service of the execution. The marshal does not earn much, if anything, on this initial service.
Like a contingency fee collection attorney, the marshal earns their fee after they collect the money. The marshal is entitled to a 5% poundage fee (commission) plus statutory fees. If the marshal collects $100,000 toward the judgment, then they are entitled to $5,000 or 5% of the total collected. Additional statutory fees can run a few hundred dollars.
The city marshal is entitled to payment following execution regardless of whether the money ends up with them, the debt collection attorney, or the creditor.
So, Who Pays the Marshal?
When the marshal serves the levy on the judgment debtor, it includes a payoff figure that combines the judgment amount, post-judgment interest, marshal’s poundage, and statutory fees.
It is the debtor’s responsibility to pay these fees to the marshal. The marshal’s fees are in addition to any money you, as the judgment creditor, are entitled to.
But here’s the catch: sometimes, after being served with the levy, the judgment debtor will contact the creditor directly. Othertimes, their attorney might reach out to the creditor’s attorney to make a deal. You should add the 5% poundage and statutory fees due to the marshal as part of that deal. If you don’t, you’ll be stuck paying them yourself. That’s because the marshal acts as your agent.
Looking for an attorney to handle your debt collection case? Contact Frank, Frank, Goldstein and Nager by email or call +1 (212) 686-0100. We have the experience that pays. Subscribe to our YouTube channel for more debt collection news and best practices.
