N.Y. Debtor & Creditor Law Section 59
Consenting creditor must relinquish security

A creditor who has, in his own name, or in trust for him, a mortgage, judgment, or other security, for the payment of a sum of money, which is a lien upon, or otherwise affects, real or personal property belonging to the petitioner, or transferred by him since the lien was created, cannot become a consenting creditor, with respect to the debt so secured, unless he adds to or includes in his consent, a written declaration, under his hand, to the effect, that he relinquishes the mortgage, judgment, or other security, so far as it affects that property, to the trustee to be appointed pursuant to the petition, for the benefit of all the creditors. Such a declaration operates, to that extent, as an assignment to the trustee, of the mortgage, judgment, or other security; and vests in him accordingly all the right and interest of the consenting creditor therein.

Source: Section 59 — Consenting creditor must relinquish security, https://www.­nysenate.­gov/legislation/laws/DCD/59 (updated Sep. 22, 2014; accessed Jan. 18, 2025).

50
Who may be discharged 51
To what court application to be made 52
Contents of petition 53
Consent of creditors to be annexed 54
Consent of executor, administrator, receiver, or trustee 55
Consent of corporation or joint-stock association 56
Consent of partnership 57
Effect of consent where petitioner is a joint debtor 58
Consent of purchaser or assignee of debt 59
Consenting creditor must relinquish security 60
Penalty if creditor swears falsely 61
Affidavit of consenting creditor 62
When non-resident creditor to annex accounts and securities 63
Petitioner’s schedule 64
Petitioner’s affidavit 65
Order to show cause 66
How order published and served 67
Hearing 68
Putting cause on calendar 69
Opposing creditor to file specifications, and may demand jury trial 70
Opposing creditor to file proofs, if not named in schedule 71
Proceedings if jurors do not agree 72
When insolvent required to produce his non-resident wife 73
Examination of insolvent 74
When insolvent cannot be discharged 75
When assignment to be directed 76
Assignment 77
Trustees, how designated 78
Effect of assignment 79
When discharge to be granted 80
Order to show cause where trustee refuses to give certificate 81
Proceedings upon return of order 82
Discharge and other papers to be recorded 83
Effect of discharge 84
Effect of discharge as to foreign contracts or creditors 85
Effect of discharge as to debts to the United States and the state 86
Insolvent to be released from imprisonment 87
Discharge, when void 88
Invalidity may be proved on motion to vacate order of arrest or execution
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Accessed:
Jan. 18, 2025

Last modified:
Sep. 22, 2014

§ 59’s source at nysenate​.gov

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