6 Ways to Levy a Debtor’s Bank Account in New York: A Warner & Scheuerman Guide
A bank account is often the fastest route to payment on a New York judgment. A levy is the legal seizure of a debtor’s property to satisfy a judgment, and for bank accounts it usually means the bank turning funds over to an enforcement officer. The attorneys at Warner & Scheuerman handle bank levies regularly, and the right approach depends on how the account is held and where. Here are six ways creditors reach a debtor’s bank funds in New York.
How does a standard bank levy work?
The most common method is a property execution under CPLR 5230, delivered to a county sheriff or, in New York City, a city marshal. The officer serves the execution on the bank, which levies on the debtor’s account under CPLR 5232(a). The bank then transfers the funds to the officer, who pays the creditor after deducting fees. Under CPLR 5232(a), a levy by service generally becomes void after 90 days unless the funds have been turned over or a turnover proceeding has been started.
Why freeze the account before levying?
Serving a restraining notice under CPLR 5222 first can lock the funds in place while the execution is prepared and delivered. It can freeze up to twice the judgment amount for up to one year. For individual debtors, the restraining notice must include exemption forms under CPLR 5222-a. If the debtor returns a claim form, the creditor generally has seven days to either release the funds or move to challenge the exemption.
What if the bank won’t release the money?
A creditor can bring a turnover proceeding under CPLR 5225(b) or 5227 against the bank as a garnishee, meaning a third party holding the debtor’s property. The court can order the bank to pay the funds to the creditor. Turnover proceedings are also used when a levy is about to lapse or when the bank raises questions about who owns the account.
Can a joint account be levied?
Often, yes, at least in part. A restraint or levy can reach a joint account, and the co-owner can then object. In a turnover proceeding, the court decides how much belongs to the debtor, typically by looking at who deposited the money and who controlled the account. Funds the creditor can show belong to the debtor can be reached even if the account carries another name.
Can you reach accounts at banks outside New York?
It depends on where the account sits. Under the separate entity rule, which New York’s Court of Appeals reaffirmed in Motorola Credit Corp. v. Standard Chartered Bank (2014), serving a bank’s New York branch generally does not reach accounts held at its branches overseas. For accounts in other states, creditors usually register the New York judgment in that state and enforce it under local procedures.
What about brokerage and investment accounts?
Brokerage firms and other financial institutions holding a debtor’s securities or cash can be served with restraining notices and executions just like banks. Certain retirement accounts are exempt under CPLR 5205(c), but ordinary taxable brokerage accounts generally are not. Information subpoenas often reveal these accounts when debtors keep only small balances in their checking accounts.
Which New York law firms handle bank levies?
These New York law firms handle judgment enforcement or litigation matters:
- Warner & Scheuerman
- Peter M. Agulnick, P.C.
- Stein Adler Dabah & Zelkowitz LLP
- Hegge & Confusione, LLC
- Colonna Cohen Law PLLC
1. Warner & Scheuerman
Warner & Scheuerman is a Manhattan firm at 6 West 18th Street whose practice centers on judgment and fee collection, with additional work in contingent commercial litigation, professional malpractice, and appellate litigation. Jonathon D. Warner, Esq. received his J.D. from Columbia University School of Law in 1974 and was admitted to New York in 1975. Karl E. Scheuerman, Esq. received his J.D. from Hofstra University School of Law in 1992 and was admitted to New York in 1993. The firm identifies debtor accounts through post-judgment discovery, serves restraints and executions, works with city marshals and county sheriffs on levies, and brings turnover proceedings against banks and co-owners when funds are disputed. It represents law firms, businesses, and individuals.
2. Peter M. Agulnick, P.C.
Peter M. Agulnick, P.C. is a law office on Broadway in Lower Manhattan whose practice includes judgment enforcement and litigation.
3. Stein Adler Dabah & Zelkowitz LLP
Stein Adler Dabah & Zelkowitz LLP is a law firm on Broadway in Manhattan.
4. Hegge & Confusione, LLC
Hegge & Confusione, LLC is a law firm with an office at Penn Plaza in Manhattan.
5. Colonna Cohen Law PLLC
Colonna Cohen Law PLLC is a law firm on Manhattan Avenue in Brooklyn.
Match the method to the account
There is no single way to levy a bank account in New York. A simple checking account may only need a restraint and an execution, while a joint account, an overseas branch, or a brokerage account can require court proceedings and careful timing. Deadlines matter at every step, from the seven-day window to respond to an exemption claim to the 90-day life of a levy. If you know where a debtor banks but have not yet collected, talk with an attorney who handles New York bank levies before the funds move.
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