There are many reasons why a commercial debt might initially be collected in a state other than New York. Most often it is because the contract between the two businesses contained a clause limiting judicial resolution of disputes to the other state. As a business owner or manager, you had no real choice; you were required to collect your claim in a sister state. You have now reduced the claim to a judgment. You breathe a sigh of relief; now you’ll get your money.
Collecting is Two-Step Process
Well, not necessarily: That is to say, getting a valid judgment against a commercial debtor is really only step one of a two-step collection process. Just as it takes skill, proficiency, and know-how to get the judgment itself, it often takes additional prowess to get paid. The court isn’t going to collect the money for your business; you’ll need to continue to be aggressive in your efforts. If the judgment debtor – the business that owes you the money – has assets in New York, you can initiate action to collect within the Empire State.
Collection Process Depends Upon “How” You Achieved Your Judgment
In New York, the collection process for an out-of-state judgment depends upon whether the judgment debtor “appeared” in that “foreign,” or sister state proceeding. For example, if the judgment debtor actively participated in the lawsuit – e.g., by filing an answer or other pleading – the New York collection process begins merely with the filing of the out-of-state judgment in an appropriate New York court.
Alternatively, if the judgment debtor did not appear in the collection lawsuit – that is to say, if you business obtained a default judgment – then the process is a bit more complicated. New York procedural law requires that a New York court determine (a) whether there was adequate service of legal papers in the out-of-state suit, and (b) whether the out-of-state court had jurisdiction to hear the case. In most cases, this involves a relatively straightforward hearing in the New York court.
Judgment Enforcement Techniques
Once the out-of-state judgment has been “transferred” to New York, normal judgment enforcement proceedings and techniques follow. Those include:
- Placing liens on real estate, as well as executing upon and selling the property
- Asset searches/public record research
- Post-judgment proceedings, such as levying on third-party creditors. For example, if your judgment debtor has accounts receivable within the state of New York, you can – after appropriate court filings – require those entities to pay you, rather than your judgment debtor.
- Judicial applications for “turnover” of any installment payments that your judgment debtor may own or possess
- Actions to set aside fraudulent conveyances
Collection on an Out-of-State Judgment Requires Diligence, Patience, and a Skilled Attorney
The E. Stewart Jones Hacker Murphy law firm has extensive experience in all types of litigation, including the collection of out-of-state judgments. The firm also has the resources to help you recover what you are owed. We are one of the most highly respected law firms in upstate New York and the capital district. With offices in Albany, Troy, Saratoga Springs, and Schenectady, we have been representing clients for more than 125 years. Make the right call. Call us now at (518) 730-7270 or complete our online form. The E. Stewart Jones Hacker Murphy law firm has an attorney available to assist clients 24 hours a day, 7 days a week, 365 days a year – even on holidays.