N.Y.
Civil Practice Law & Rules Section 5222-A
Service of notices and forms and procedure for claim of exemption
(a)
Applicability. Any person authorized under subdivision (a) of § 5222 (Restraining notice)section fifty-two hundred twenty-two of this article issuing a restraining notice affecting a natural person’s account at a banking institution pursuant to such subdivision must comply with this section, in addition to the general provisions set forth in such section. Any sheriff levying against a natural person’s account at a banking institution pursuant to § 5232 (Levy upon personal property)section fifty-two hundred thirty-two of this article must comply with this section, in addition to the general provisions set forth in § 5232 (Levy upon personal property)section fifty-two hundred thirty-two of this article. The procedures set forth in subdivisions (b), (c), (d), (e), (f) and (g) of this section shall not apply where pursuant to subdivision (h) and/or (i) of section fifty-two hundred twenty-two or subdivision (e) of § 5232 (Levy upon personal property)section fifty-two hundred thirty-two of this article, no funds in the account are restrained or levied upon.(b)
Service of exemption notice and exemption claim form.1.
Service with restraining notice upon banking institution. The person issuing the restraining notice pursuant to subdivision (a) of § 5222 (Restraining notice)section fifty-two hundred twenty-two of this article shall provide the banking institution with the restraining notice, a copy of the restraining notice, an exemption notice and two exemption claim forms with sections titled “ADDRESS A” and “ADDRESS B” completed. The exemption notice and exemption claim forms shall be in the forms set forth in paragraph four of this subdivision. The notice and the forms shall be served on the banking institution together with the restraining notice and copy of the restraining notice. Service must be accomplished in accordance with subdivision (a) or (g) of § 5222 (Restraining notice)section fifty-two hundred twenty-two of this article. Failure to serve the notice and forms together with the restraining notice renders the restraining notice void, and the banking institution shall not restrain the account.2.
Service of execution by levy upon a garnishee banking institution. When serving an execution pursuant to subdivision (a) of § 5232 (Levy upon personal property)section fifty-two hundred thirty-two of this article, the sheriff shall provide the banking institution with an exemption notice and two exemption claim forms, which shall be in the forms set forth in paragraph four of this subdivision. The sheriff shall serve both the exemption notice and the exemption claim forms on the banking institution together with the execution notice. Service must be accomplished in accordance with subdivision (a) of § 5232 (Levy upon personal property)section fifty-two hundred thirty-two of this article. Failure to serve the notice and forms renders the execution void, and the banking institution shall not levy upon the account.3.
Service upon judgment debtor. Within two business days after receipt of the restraining notice or execution, exemption notice and exemption claim forms, the banking institution shall serve upon the judgment debtor the copy of the restraining notice, the exemption notice and two exemption claim forms. The banking institution shall serve the notice and forms by first class mail to the last known address of the judgment debtor. The inadvertent failure by a depository institution to provide the notice required by this subdivision shall not give rise to liability on the part of the depository institution.4.
Content of exemption notice and exemption claim form.a.
The exemption notice shall be in the following form: “EXEMPTION NOTICE as required by New York Law YOUR BANK ACCOUNT IS RESTRAINED OR ”FROZEN“ The attached Restraining Notice or notice of Levy by Execution has been issued against your bank account. You are receiving this notice because a creditor has obtained a money judgment against you, and one or more of your bank accounts has been restrained to pay the judgment. A money judgment is a court’s decision that you owe money to a creditor. You should be aware that FUTURE DEPOSITS into your account(s) might also be restrained if you do not respond to this notice. You may be able to ”vacate“ (remove) the judgment. If the judgment is vacated, your bank account will be released. Consult an attorney (including free legal services) or visit the court clerk for more information about how to do this. Under state and federal law, certain types of funds cannot be taken from your bank account to pay a judgment. Such money is said to be ”exempt." DOES YOUR BANK ACCOUNT CONTAIN ANY OF THE FOLLOWING TYPES OF FUNDS? 1. Social security;2.
Social security disability (SSD);3.
Supplemental security income (SSI);4.
Public assistance (welfare);5.
Income earned while receiving SSI or public assistance;6.
Veterans benefits;7.
Unemployment insurance;8.
Payments from pensions and retirement accounts;9.
Disability benefits;10.
Income earned in the last 60 days (90% of which is exempt);11.
Workers’ compensation benefits;12.
Child support;13.
Spousal support or maintenance (alimony);14.
Railroad retirement;15.
Black lung benefits; and/or 16. COVID-19 stimulus relief for individuals and families with children. If YES, you can claim that your money is exempt and cannot be taken. To make the claim, you must (a) complete the EXEMPTION CLAIM FORM attached;(b)
deliver or mail the form to the bank with the restrained or “frozen” account; and(c)
deliver or mail the form to the creditor or its attorney at the address listed on the form. You must send the forms within 20 DAYS of the postmarked date on the envelope holding this notice. You may be able to get your account released faster if you send to the creditor or its attorney written proof that your money is exempt. Proof can include an award letter from the government, an annual statement from your pension, pay stubs, copies of checks, bank records showing the last two months of account activity, or other papers showing that the money in your bank account is exempt. If you send the creditor’s attorney proof that the money in your account is exempt, the attorney must release that money within seven days. You do not need an attorney to make an exemption claim using the form." b. The exemption claim form shall be in the following form: NAME OF COURT, NAME OF COUNTY -------------------------------------x PLAINTIFF/PETITIONER/CLAIMANT INDEX NO. V. DEFENDANT/RESPONDENT EXEMPTION CLAIM FORM -------------------------------------x NAME AND ADDRESS OF JUDGMENT NAME AND ADDRESS OF FINANCIAL CREDITOR OR ATTORNEY INSTITUTION (To be completed by judgment (To be completed by judgment creditor or attorney) creditor or attorney) ADDRESS ADDRESS A_____________________ B______________________ ____________________ _____________________ Directions: To claim that some or all of the funds in your account are exempt, complete both copies of this form, and make one copy for yourself. Mail or deliver one form to ADDRESS A and one form to ADDRESS B within twenty days of the date on the envelope holding this notice. **If you have any documents, such as an award letter, an annual statement from your pension, paystubs, copies of checks or bank records showing the last two months of account activity, include copies of the documents with this form. Your account may be released more quickly. _________________________________________________________________________ I state that my account contains the following type(s) of funds (check all that apply): ____Social security ____Social security disability (SSD) ____Supplemental security income (SSI) ____Public assistance ____Wages while receiving SSI or public assistance ____Veterans benefits ____Unemployment insurance ____Payments from pensions and retirement accounts ____Income earned in the last 60 days (90% of which is exempt) ____Child support ____Spousal support or maintenance (alimony) ____Workers’ compensation ____Railroad retirement or black lung benefits _____COVID-19 stimulus relief for individuals and families with children ____Other (describe exemption):_________________________________ I request that any correspondence to me regarding my claim be sent to the following address: _____________________________________________________________________ (FILL IN YOUR COMPLETE ADDRESS) I certify under penalty of perjury that the statement above is true to the best of my knowledge and belief. _________________________________________________________________________ DATE SIGNATURE OF JUDGMENT DEBTOR (c) Claim of exemption.1.
To claim an exemption pursuant to the procedures in this section, the judgment debtor shall complete the exemption claim forms, sign them under penalty of perjury, and serve them within twenty days of the date postmarked on the correspondence containing the notice and forms. The judgment debtor shall serve one completed exemption claim form on the banking institution and the other on the attorney for the judgment creditor. In the event that there is no attorney for the judgment creditor, then the exemption claim form must be served directly on the judgment creditor. The judgment debtor may serve the exemption claim forms in person or by first-class mail.2.
Where the banking institution receives an exemption claim form, it shall notify the judgment creditor forthwith of the date on which the funds will be released pursuant to paragraph three of this subdivision.3.
The banking institution shall release all funds in the judgment debtor’s account eight days after the date postmarked on the envelope containing the executed exemption claim form mailed to the banking institution or the date of personal delivery of the executed exemption claim form to the banking institution, and the restraint shall be deemed void, except where the judgment creditor interposes an objection to the exemption within that time.4.
Where the executed exemption claim form sent to the judgment creditor is accompanied by information demonstrating that all funds in the account are exempt, the judgment creditor shall, within seven days of the postmark on the envelope containing the exemption claim form and accompanying information, instruct the banking institution to release the account, and the restraint shall be deemed void. Where the account contains some funds from exempt sources, and other funds from unknown sources, the judgment creditor shall apply the lowest intermediate balance principle of accounting and, within seven days of the postmark on the envelope containing the exemption claim form and accompanying information, shall instruct the banking institution to release the exempt money in the account. The provisions of paragraph two of subdivision (b) of rule twenty-one hundred three of this chapter shall not enlarge the judgment creditor’s time to move pursuant to this section. Information demonstrating that funds are exempt includes, but is not limited to, originals or copies of benefit award letters, checks, check stubs or any other document that discloses the source of the judgment debtor’s income, and bank records showing the last two months of account activity. If the judgment creditor fails to act in accordance with this subdivision, the judgment creditor shall be deemed to have acted in bad faith and the judgment debtor may seek a court award of the damages, costs, fees and penalties provided for in subdivision (g) of this section.5.
If no claim of exemption is received by the banking institution within twenty-five days after the notice and forms are mailed to the judgment debtor, the funds remain subject to the restraining notice or execution. Failure of the judgment debtor to deliver the executed exemption claim form does not constitute a waiver of any right to an exemption.(d)
Objection to exemption claim and request for hearing. A judgment creditor may object to the claim of exemption by moving for an order pursuant to § 5240 (Modification or protective order)section fifty-two hundred forty of this article. The judgment creditor must serve the banking institution and the judgment debtor with its motion papers within eight days after the date postmarked on the envelope containing the executed exemption claim form or the date of personal delivery of the executed exemption claim form to the banking institution, and the provisions of paragraph one of subdivision (b) of rule twenty-one hundred three of this chapter shall not enlarge the judgment creditor’s time to move pursuant to this section. The judgment debtor shall be served at the address provided on the exemption claim form. The affirmation or affidavit in support of the motion shall demonstrate a reasonable belief that such judgment debtor’s account contains funds that are not exempt from execution and the amount of such nonexempt funds. The executed exemption claim form shall be attached to the affirmation or affidavit. The affirmation or affidavit shall not be conclusory, but is required to show the factual basis upon which the reasonable belief is based. The hearing to decide the motion shall be noticed for seven days after service of the moving papers. The executed exemption claim form shall be prima facie evidence at such hearing that the funds in the account are exempt funds. The burden of proof shall be upon the judgment creditor to establish the amount of funds that are not exempt. The court shall, within five days of the hearing, issue an order stating whether or not funds in the account are exempt and ordering the appropriate relief. The judgment creditor or its attorney must serve the order on the banking institution and the judgment debtor no later than two business days after the court issues the order.(e)
Duties of banking institution if objection is made to exemption claim. Upon receipt of a written objection pursuant to subdivision (d) of this section from the judgment creditor or its attorney within the specified eight-day period, the banking institution shall retain the funds claimed to be exempt for twenty-one days unless otherwise ordered by the court. If the period of twenty-one days expires and the banking institution has not been otherwise ordered by the court, the banking institution shall release the funds to the judgment debtor.(f)
Release of funds. At any time during the procedure specified in this section, the judgment debtor or the judgment creditor may, by a writing dated after the service of the restraining notice, direct the banking institution to release the funds in question to the other party. Upon receipt of a release, the banking institution shall release the funds as directed.(g)
Proceedings; bad faith claims. Where the judgment creditor objects to a claim of exemption pursuant to subdivision (d) of this section and the court finds that the judgment creditor disputed the claim of exemption in bad faith, as provided in paragraph four of subdivision (c) of this section, the judgment debtor shall be awarded costs, reasonable attorney fees, actual damages and an amount not to exceed one thousand dollars.(h)
Rights of judgment debtor. Nothing in this section shall in any way restrict the rights and remedies otherwise available to a judgment debtor, including but not limited to, rights to property exemptions under federal and state law.(i)
The provisions of this section do not apply when the state of New York, or any of its agencies or municipal corporations is the judgment creditor, or if the debt enforced is for child support, spousal support, maintenance or alimony, provided that the restraining notice contains a legend at the top thereof, above the caption, in sixteen point bold type with the following language: “The judgment creditor is the state of New York, or any of its agencies or municipal corporations, AND/OR the debt enforced is for child support, spousal support, maintenance or alimony.”.
Source:
Section 5222-A — Service of notices and forms and procedure for claim of exemption, https://www.nysenate.gov/legislation/laws/CVP/5222-A (updated Sep. 22, 2014; accessed Oct. 26, 2024).
