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S05724 Summary:

BILL NOS05724A
 
SAME ASSAME AS A06474-A
 
SPONSORTHOMAS
 
COSPNSRBIAGGI, BROOKS, JACKSON, KRUEGER, MYRIE, RAMOS, RIVERA, SEPULVEDA
 
MLTSPNSR
 
Amd §§5004, 3215, 3218, 5230, 5231 & 5222, CPLR
 
Provides that the rate of interest on money judgments in actions involving consumer debt where the defendant is a natural person shall be calculated at a rate of two percent.
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S05724 Actions:

BILL NOS05724A
 
03/17/2021REFERRED TO JUDICIARY
05/11/20211ST REPORT CAL.1003
05/12/20212ND REPORT CAL.
05/19/2021ADVANCED TO THIRD READING
06/03/2021AMENDED ON THIRD READING 5724A
06/08/2021PASSED SENATE
06/08/2021DELIVERED TO ASSEMBLY
06/08/2021referred to codes
06/10/2021substituted for a6474a
06/10/2021ordered to third reading cal.328
06/10/2021passed assembly
06/10/2021returned to senate
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S05724 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5724--A
            Cal. No. 1003
 
                               2021-2022 Regular Sessions
 
                    IN SENATE
 
                                     March 17, 2021
                                       ___________
 
        Introduced  by  Sens.  THOMAS,  BIAGGI,  BROOKS,  KRUEGER, MYRIE, RAMOS,
          RIVERA, SEPULVEDA -- read twice and ordered printed, and when  printed
          to  be  committed  to the Committee on Judiciary -- reported favorably
          from said committee, ordered to first and second report, ordered to  a
          third  reading,  amended and ordered reprinted, retaining its place in
          the order of third reading
 
        AN ACT to amend the civil practice law and rules,  in  relation  to  the
          rate of interest applicable to money judgments arising out of consumer
          debt
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 5004 of  the  civil  practice  law  and  rules,  as
     2  amended  by  chapter  258  of  the  laws  of 1981, is amended to read as
     3  follows:
     4    § 5004. Rate of interest. (a) Interest shall be at the  rate  of  nine
     5  per  centum  per  annum,  except  where  otherwise  provided by statute;
     6  provided the annual rate of interest to be paid in an action arising out
     7  of a consumer debt where a natural person is a defendant  shall  be  two
     8  per  centum  per  annum (i) on a judgment or accrued claim for judgments
     9  entered on or after the effective date of the chapter of the laws of two
    10  thousand twenty-one which amended this section, and  (ii)  for  interest
    11  upon  a judgment pursuant to section five thousand three of this article
    12  from the date of the entry of judgment on any part of a judgment entered
    13  before the effective date of the chapter of the  laws  of  two  thousand
    14  twenty-one  which  amended this section that is unpaid as of such effec-
    15  tive date.
    16    (b) For the purpose of this section "consumer debt"  means  any  obli-
    17  gation   or   alleged   obligation   of  any natural person to pay money
    18  arising out of a transaction in which the money, property, insurance  or
    19  services  which  are  the  subject  of the transaction are primarily for
    20  personal,  family  or household purposes, whether or not such obligation
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00043-14-1

        S. 5724--A                          2
 
     1  has  been reduced to judgment, including, but not limited to, a consumer
     2  credit transaction, as defined in subdivision (f) of section one hundred
     3  five of this chapter.
     4    (c)  This  section  does  not  affect or create any rights or remedies
     5  related to any amounts paid prior to the effective date of this subdivi-
     6  sion, including amounts paid to satisfy judgments or to accrued interest
     7  or fees paid, or with respect to judgments satisfied prior to the effec-
     8  tive date of this subdivision. For amounts paid prior to  the  effective
     9  date of this subdivision and lawfully applied in satisfaction or partial
    10  satisfaction  of interest or fees accrued prior to the effective date of
    11  this subdivision, this section shall not be construed to require a judg-
    12  ment creditor or sheriff to (i) return or refund such amounts  to  judg-
    13  ment debtors; or (ii) apply such payments to satisfy any part of a money
    14  judgment  other  than fees or interest upon judgment pursuant to section
    15  five thousand three of this article.
    16    (d) If any word, phrase, clause, sentence, paragraph, subdivision,  or
    17  part of this section or its application to any person or circumstance is
    18  held  invalid by any court of competent jurisdiction after exhaustion of
    19  all further judicial review, the invalidity shall not affect, impair, or
    20  invalidate the remainder of this section or applications of this article
    21  which can be given effect without the invalid provision or  application,
    22  and to this end the provisions of this section are severable.
    23    §  2.  Subdivisions  (f) and (i) of section 3215 of the civil practice
    24  law and rules, subdivision (f) as amended by chapter 453 of the laws  of
    25  2006,  and  subdivision (i) as amended by chapter 31 of the laws of 1967
    26  and relettered by chapter 255 of the laws of 1992, are amended  to  read
    27  as follows:
    28    (f)  Proof.  On any application for judgment by default, the applicant
    29  shall file proof of service of the  summons  and  the  complaint,  or  a
    30  summons  and  notice  served  pursuant to subdivision (b) of rule 305 or
    31  subdivision (a) of rule 316 of this chapter,  and  proof  of  the  facts
    32  constituting  the  claim,  the default and the amount due, including, if
    33  applicable, a statement that the interest rate for consumer debt  pursu-
    34  ant  to section five thousand four of this chapter applies, by affidavit
    35  made by the party, or where the state of New York is the  plaintiff,  by
    36  affidavit  made  by  an attorney from the office of the attorney general
    37  who has or obtains knowledge of  such  facts  through  review  of  state
    38  records or otherwise. Where a verified complaint has been served, it may
    39  be  used  as  the  affidavit of the facts constituting the claim and the
    40  amount due; in such case, an affidavit as to the default shall  be  made
    41  by  the  party or the party's attorney. When jurisdiction is based on an
    42  attachment of property, the  affidavit  must  state  that  an  order  of
    43  attachment  granted in the action has been levied on the property of the
    44  defendant, describe the property and state its value. Proof  of  mailing
    45  the  notice  required by subdivision (g) of this section, where applica-
    46  ble, shall also be filed.
    47    (i) Default judgment for failure to comply with stipulation of settle-
    48  ment. 1. Where, after  commencement  of  an  action,  a  stipulation  of
    49  settlement  is  made,  providing, in the event of failure to comply with
    50  the stipulation, for entry without further notice of  a  judgment  in  a
    51  specified  amount  with interest, if any, from a date certain, the clerk
    52  shall enter judgment on the stipulation and an affidavit as to the fail-
    53  ure to comply with the terms thereof, together with  a  complaint  or  a
    54  concise  statement  of  the  facts on which the claim was based, and, if
    55  applicable, a statement that the interest rate for consumer debt  pursu-
    56  ant to section five thousand four of this chapter applies.

        S. 5724--A                          3
 
     1    2. Where, after commencement of an action, a stipulation of settlement
     2  is  made,  providing,  in the event of failure to comply with the stipu-
     3  lation, for entry without further notice of a  judgment  dismissing  the
     4  action, the clerk shall enter judgment on the stipulation and an affida-
     5  vit  as  to  the failure to comply with the terms thereof, together with
     6  the pleadings or a concise statement of the facts on which the claim and
     7  the defense were based.
     8    § 3. Paragraph 1 of subdivision (a) of section 3218 of the civil prac-
     9  tice law and rules, as amended by chapter 214 of the laws  of  2019,  is
    10  amended to read as follows:
    11    1.  stating the sum for which judgment may be entered, authorizing the
    12  entry of judgment, [and] stating the county where the defendant  resides
    13  and,  if  applicable,  stating  that the interest rate for consumer debt
    14  pursuant to section five thousand four of this chapter applies;
    15    § 4. Subdivisions (a) and (b) of section 5230 of  the  civil  practice
    16  law  and  rules, subdivision (a) as amended by chapter 24 of the laws of
    17  2009 and subdivision (b) as amended by chapter 59 of the laws  of  1993,
    18  are amended to read as follows:
    19    (a)  Form.  An  execution  shall specify the date that the judgment or
    20  order was entered, the court in which it was entered, the amount of  the
    21  judgment or order, the applicable interest rate and the date as of which
    22  the  new  interest  rate  applies if the interest rate for consumer debt
    23  pursuant to section five thousand four of this chapter applies  and  the
    24  amount  due  thereon  and  it  shall specify the names of the parties in
    25  whose favor and against whom the judgment or order was entered.  If  the
    26  applicable  interest rate changes pursuant to section five thousand four
    27  of this chapter while an execution is  ongoing,  the  judgment  creditor
    28  shall issue an amended execution within sixty days of the effective date
    29  of the chapter of the laws of two thousand twenty-one which amended this
    30  subdivision,  effective  as of the date of the rate change. An execution
    31  shall direct that only the property in which a named judgment debtor  or
    32  obligor  who  is  not deceased has an interest, or the debts owed to the
    33  named judgment debtor or obligor, be levied upon or sold thereunder  and
    34  shall specify the last known address of that judgment debtor or obligor.
    35  Except  in  cases  when the state of New York, or any of its agencies or
    36  municipal corporations is the judgment creditor, or if the debt enforced
    37  is for child support, spousal support, maintenance or alimony,  provided
    38  that in those instances the execution contains a legend at the top ther-
    39  eof,  above  the  caption, in sixteen point bold type with the following
    40  language: "The judgment creditor is the state of New York, or any of its
    41  agencies or municipal corporations, AND/OR  the  debt  enforced  is  for
    42  child  support,  spousal support, maintenance or alimony.", an execution
    43  notice shall state that, pursuant to subdivision (l) of  section  fifty-
    44  two  hundred  five of this article, two thousand five hundred dollars of
    45  an account containing direct deposit or electronic  payments  reasonably
    46  identifiable as statutorily exempt payments, as defined in paragraph two
    47  of subdivision (l) of section fifty-two hundred five of this article, is
    48  exempt  from  execution  and  that  the  garnishee  cannot  levy upon or
    49  restrain two thousand five hundred dollars in such an account. Except in
    50  cases when the state of New York, or any of its  agencies  or  municipal
    51  corporations  is  the  judgment creditor, or if the debt enforced is for
    52  child support, spousal support, maintenance or alimony, provided that in
    53  those instances the execution contains a  legend  at  the  top  thereof,
    54  above  the  caption,  in  sixteen  point  bold  type  with the following
    55  language: "The judgment creditor is the state of New York, or any of its
    56  agencies or municipal corporations, AND/OR  the  debt  enforced  is  for

        S. 5724--A                          4
 
     1  child  support,  spousal support, maintenance or alimony.", an execution
     2  notice shall likewise state that pursuant to subdivision (i) of  section
     3  fifty-two  hundred  twenty-two  of  this article, an execution shall not
     4  apply  to  an amount equal to or less than ninety percent of the greater
     5  of two hundred forty times the federal minimum hourly wage prescribed in
     6  the Fair Labor Standards Act of 1938 or  two  hundred  forty  times  the
     7  state minimum hourly wage prescribed in section six hundred fifty-two of
     8  the  labor law as in effect at the time the earnings are payable, except
     9  such part as a court determines to be  unnecessary  for  the  reasonable
    10  requirements of the judgment debtor and his or her dependents. Where the
    11  judgment  or order was entered in a court other than the supreme, county
    12  or a family court, the execution shall also specify the date on which  a
    13  transcript  of  the  judgment  or  order was filed with the clerk of the
    14  county in which the judgment was  entered.  Where  jurisdiction  in  the
    15  action  was based upon a levy upon property or debt pursuant to an order
    16  of attachment, the execution shall also state that  fact,  describe  all
    17  property  and  debts levied upon, and direct that only such property and
    18  debts be sold thereunder. Where the judgment or order was recovered  for
    19  all  or  part  of a mortgage debt, the execution shall also describe the
    20  mortgaged property, specify the book and  page  where  the  mortgage  is
    21  recorded,  and  direct  that no part of the mortgaged property be levied
    22  upon or sold thereunder.
    23    (b) Issuance. At any time before a judgment or order is  satisfied  or
    24  vacated, an execution may be issued from the supreme court, county court
    25  or a family court, in the county in which the judgment was first docket-
    26  ed,  by the clerk of the court or the attorney for the judgment creditor
    27  as officer of the court, to the sheriffs of one or more counties of  the
    28  state,  directing  each  of them to satisfy the judgment or order out of
    29  the real and personal property of the judgment debtor or obligor and the
    30  debts due to him or her.  Provided, however, if the applicable  interest
    31  rate  changes  pursuant  to  section  five thousand four of this chapter
    32  while an execution is ongoing, the clerk of the  court  of  the  supreme
    33  court,  county court or a family court, in the county in which the judg-
    34  ment was first docketed, or the attorney for the  judgment  creditor  as
    35  officer  of the court, shall be authorized to issue an amended execution
    36  to the sheriffs of one or more counties of the state and shall issue  an
    37  amended execution within sixty days of the effective date of the chapter
    38  of  the  laws of two thousand twenty-one which amended this subdivision,
    39  effective as of the date of the rate change. Where the judgment or order
    40  is for support and is payable to the support collection unit  designated
    41  by  the appropriate social services district, such unit shall be author-
    42  ized to issue the execution and to satisfy the judgment or order out  of
    43  the real and personal property of the judgment debtor or obligor and the
    44  debts due to him or her.
    45    §  5.  Subdivisions (a), (d), (j) and (k) of section 5231 of the civil
    46  practice law and rules, subdivisions (a), (d)  and  (j)  as  amended  by
    47  chapter  550  of the laws of 2015, subdivision (k) as amended by chapter
    48  241 of the laws of 1986 and as relettered by chapter 829 of the laws  of
    49  1987, are amended to read as follows:
    50    (a)  Form.  An  income  execution  shall  specify,  in addition to the
    51  requirements of subdivision (a) of section 5230[,]:  (i)  the  name  and
    52  address of the person or entity from whom the judgment debtor is receiv-
    53  ing  or  will  receive money; (ii) the amount of money, the frequency of
    54  its payment and the amount of the installments to  be  collected  there-
    55  from; and (iii) shall contain a notice to the judgment debtor that he or
    56  she  shall commence payment of the installments specified to the sheriff

        S. 5724--A                          5
 
     1  forthwith and that, upon his or  her  default,  the  execution  will  be
     2  served  upon  the  person  or entity from whom he or she is receiving or
     3  will receive money. Provided,  however,  that  if  a  judgment  creditor
     4  issues  an  amended  execution  pursuant  to  section  five thousand two
     5  hundred thirty of this article  because  the  applicable  interest  rate
     6  changes  pursuant  to  section  five  thousand four of this chapter, the
     7  income execution need only specify  paragraphs  (i)  and  (ii)  of  this
     8  subdivision.
     9    (d)  Service upon debtor; first service by sheriff. Within twenty days
    10  after an income execution is delivered to the sheriff, the sheriff shall
    11  serve a copy of it upon the judgment debtor, in the  same  manner  as  a
    12  summons  or, in lieu thereof, by certified mail return receipt requested
    13  provided an additional copy is sent by regular mail to  the  debtor.  If
    14  service  is  by  mail  as  herein provided, the person effecting service
    15  shall retain the receipt together with  a  post  office  certificate  of
    16  mailing  as proof of such service. Provided, however, that if a judgment
    17  creditor issues an amended execution pursuant to section  five  thousand
    18  two  hundred thirty of this article because the applicable interest rate
    19  changes pursuant to section five thousand  four  of  this  chapter,  the
    20  sheriff  shall  serve  a  copy of the income execution within forty-five
    21  days after an income execution is delivered to the sheriff.
    22    (j)  Priority;  delivery  to  another  sheriff.  Two  or  more  income
    23  executions  issued against the same judgment debtor, specifying the same
    24  person or entity from whom the money is received and  delivered  to  the
    25  same  or  different  enforcement officers shall be satisfied out of that
    26  money in the order in which the executions are delivered to  an  officer
    27  authorized  to  levy  in  the  county,  town or city in which the debtor
    28  resides or, in any county in which the person or entity  from  whom  the
    29  judgment  debtor  is  receiving  or  will receive money has an office or
    30  place of business, or where the judgment debtor is a  non-resident,  the
    31  county,  town  or city in which he or she is employed. If the applicable
    32  interest rate changes pursuant to section five  thousand  four  of  this
    33  chapter  while  an  execution  is  ongoing,  the issuance of the amended
    34  execution pursuant to section five thousand two hundred thirty  of  this
    35  article shall retain the priority of the ongoing execution. If an income
    36  execution  delivered to a sheriff is returned unsatisfied in whole or in
    37  part because the sheriff to whom it was  delivered  is  unable  to  find
    38  within  the county the person or entity from whom the judgment debtor is
    39  receiving or will receive money, the execution may be delivered  to  the
    40  sheriff  of  any  county in which such person or entity has an office or
    41  place of business. The priority of an income execution  delivered  to  a
    42  sheriff  within  twenty  days  after its return by each previous sheriff
    43  shall be determined by the time of delivery to the first sheriff.
    44    (k) Accounting by sheriff. It shall be the duty of the sheriff to whom
    45  such income execution shall be delivered, from time to time and at least
    46  once every ninety days from the time a levy shall be made thereunder, to
    47  account for and pay over to  the  person  entitled  thereto  all  monies
    48  collected  thereon, less his lawful fees and expenses for collecting the
    49  same. Provided, however, that if a judgment creditor issues  an  amended
    50  execution  pursuant  to section five thousand two hundred thirty of this
    51  article because the applicable interest rate changes pursuant to section
    52  five thousand four of this chapter, any money collected in excess of the
    53  judgment amount shall be promptly returned to the debtor.
    54    § 6. Subdivisions (a) and (c) of section 5222 of  the  civil  practice
    55  law  and rules, subdivision (a) as amended by chapter 409 of the laws of

        S. 5724--A                          6
 
     1  2000 and subdivision (c) as amended by chapter 575 of the laws of  2008,
     2  are amended to read as follows:
     3    (a)  Issuance; on whom served; form; service. A restraining notice may
     4  be issued by the clerk of the court or the  attorney  for  the  judgment
     5  creditor  as  officer  of  the  court, or by the support collection unit
     6  designated by the appropriate social services district. It may be served
     7  upon any person, except the employer of a  judgment  debtor  or  obligor
     8  where  the  property sought to be restrained consists of wages or salary
     9  due or to become due to the judgment debtor  or  obligor.  It  shall  be
    10  served  personally  in  the same manner as a summons or by registered or
    11  certified mail, return receipt requested or if  issued  by  the  support
    12  collection unit, by regular mail, or by electronic means as set forth in
    13  subdivision  (g) of this section. It shall specify all of the parties to
    14  the action, the date that the judgment or order was entered,  the  court
    15  in  which  it  was  entered, the amount of the judgment or order and the
    16  amount then due thereon, the names of all parties  in  whose  favor  and
    17  against  whom  the  judgment  or  order  was entered, it shall set forth
    18  subdivision (b) and shall state that disobedience  is  punishable  as  a
    19  contempt of court, and it shall contain an original signature or copy of
    20  the original signature of the clerk of the court or attorney or the name
    21  of the support collection unit which issued it. If the applicable inter-
    22  est  rate changes pursuant to section five thousand four of this chapter
    23  while a restraint is in effect, the judgment  creditor  shall  issue  an
    24  amended  restraining  notice,  and  include the date as of which the new
    25  interest rate applies, without leave of court as required under subdivi-
    26  sion (c) of this section. Service of a restraining notice upon a depart-
    27  ment or agency of the state or upon an institution under  its  direction
    28  shall  be made by serving a copy upon the head of the department, or the
    29  person designated by him or her and upon the state department  of  audit
    30  and  control at its office in Albany; a restraining notice served upon a
    31  state board, commission, body or agency which is not within any  depart-
    32  ment  of  the state shall be made by serving the restraining notice upon
    33  the state department of audit and  control  at  its  office  in  Albany.
    34  Service at the office of a department of the state in Albany may be made
    35  by  the  sheriff  of  any county by registered or certified mail, return
    36  receipt requested, or if issued by the support collection unit, by regu-
    37  lar mail.
    38    (c) Subsequent notice. Leave of court is required to serve  more  than
    39  one  restraining  notice  upon  the same person with respect to the same
    40  judgment or order. A judgment creditor shall not  serve  more  than  two
    41  restraining notices per year upon a natural person's banking institution
    42  account.  If  the  applicable  interest rate changes pursuant to section
    43  five thousand four of this chapter while a restraint is in  effect,  the
    44  judgment  creditor  shall  issue  an  amended restraining notice without
    45  leave of court.
    46    § 7. This act shall take effect on the one hundred twentieth day after
    47  it shall have become a law.
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