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If you’ve invested time and money in suing a company for unpaid invoices, breached contracts, or commercial debts—and won—you might think the most challenging part is over. But winning a court judgment is only the first step. The real challenge often lies in actually collecting the money you’re owed.
This article guides business owners on how to enforce a money judgment against a company—such as an LLC, corporation, or partnership—in New York. You’ll learn the necessary steps, available tools, and how to handle situations when the debtor refuses to cooperate.
Understanding What a Money Judgment Means
A money judgment is a court order that requires one party (the debtor) to pay a specific amount to another (the creditor). Once the judgment is entered, the winning party is called the “judgment creditor,” and the losing party is known as the “judgment debtor.”
In New York, a money judgment can be enforced for up to 20 years. That’s a long time, but delaying action can harm your chances—especially if the debtor business tries to shut down, hide assets, or ignore the debt.
Step 1: Docket the Judgment
Before collecting anything, you must docket your judgment with the county clerk’s office in the county where the assets are located. This makes your judgment a matter of public record and enables you to take enforcement actions such as freezing accounts or placing liens on property.
For example, if the debtor is located in Suffolk County, NY, you should docket the judgment with the Suffolk County Clerk. If they have assets in multiple counties, you may docket the judgment in each of those locations.
Step 2: Find the Debtor’s Assets
You can’t collect what you can’t locate. To enforce your judgment, you’ll need to identify the company’s assets, which may include:
- Bank accounts
- Money they’re owed by customers (accounts receivable)
- Real estate or buildings
- Vehicles
- Inventory, tools, or machinery
- Interests in other businesses
To find this information, you can use a few key tools:
Information Subpoena: You can send written questions to the business or third parties like banks or vendors, asking about the company’s finances and assets. In New York, once your judgment is entered, you can send a subpoena without needing additional court approval.
Debtor’s Exam (Post-Judgment Examination): If the business doesn’t respond, or hides information, you can ask the court to require someone from the company to answer questions under oath—either in writing or in person—about what the business owns. If they refuse, the court can take action against them.
Step 3: Use Legal Tools to Collect
Once you identify the assets, you can proceed to enforce the judgment using New York’s legal tools.
Bank Levies: You can request the sheriff or a city marshal to freeze and seize funds from the company’s bank accounts. Timing is essential—you want to act while there are still funds in the account.
Seize Accounts Receivable: You might be able to collect money that the debtor expects from their customers. For example, if the business is owed $50,000 by a client, you can serve a legal notice to that client and direct the funds to settle your judgment.
Property Liens: If the debtor owns real estate, such as a warehouse or office building, you can file a lien. This prevents the property from being sold or refinanced until the judgment is paid.
Seize Physical Assets: For valuable items like company vehicles, equipment, or inventory, you can request a writ of execution. This allows a sheriff or marshal to seize those assets and sell them at auction to help pay down the debt.
Step 4: If Needed, Go After Affiliates or New Companies
Sometimes, business debtors try to dodge payments by shifting their assets to another company or shutting down and starting fresh with a new name. In some cases, you can still recover the money.
Piercing the Corporate Veil: If the business was truly just a shell used by its owners to avoid responsibility, you might be able to pursue the individuals behind it—personally.
Successor Liability: If the original company closes but a new one emerges doing the same work with the same staff and clients, you might be able to argue that the new business should also be responsible for the old debt.
These strategies are more sophisticated and often involve returning to court. It’s best to consult an attorney if you believe this applies to your case.
Step 5: Keep the Judgment Active
Judgments in New York are valid for 20 years, but some enforcement actions—such as certain garnishments—expire after 10 years if they are not renewed. If your judgment is approaching the 10-year limit and remains unpaid, it’s wise to consult an attorney about renewing it to maintain your rights.
What If the Business Files for Bankruptcy?
Bankruptcy changes things, but it doesn’t always mean you’re out of luck.
If the company files for Chapter 7 or Chapter 11 bankruptcy, an automatic stay will temporarily halt all collection activity. At that point, you should:
- File a claim in the bankruptcy court
- Find out if your debt is dischargeable (some are not)
- Consider your options with legal counsel
Some commercial debts survive bankruptcy, while others can be partially recovered through liquidation.
Enforcing a Judgment Takes Time and Persistence
Getting a judgment is an important first step, but collecting the money can take months or even years. Some companies pay after the first notice, while others require ongoing effort.
Stay proactive by:
- Monitoring the debtor’s business activities, lawsuits, or public filings
- Repeating asset searches every few months
- Acting quickly if you discover new assets
When to Work with a Commercial Debt Collection Attorney
Enforcing a judgment against a business isn’t always easy. It often requires court filings, detailed asset searches, and legal tactics—especially if the debtor is uncooperative or shifting assets.
A lawyer who focuses on commercial debt collection in New York can help by:
- Drafting legal documents
- Working with sheriffs and marshals to enforce judgments
- Going to court if needed
- Exploring advanced options like going after affiliates or dissolving companies
Winning a judgment is an achievement—but it’s only the start. Enforcing a money judgment against a business in New York requires knowledge, persistence, and the right approach. Whether you’re working with a local LLC or a complex corporation, understanding your options is crucial.
If your business is owed money and you’re struggling to collect, legal help can turn a paper judgment into real-world results.
Need help collecting a judgment from a business?
Rosenthal & Goldhaber focuses exclusively on commercial debt collection and judgment enforcement. Contact us today for a free consultation and learn how we can help you recover what you’re owed.
Frequently Asked Judgment Enforcement Questions
Yes. In New York, LLCs and corporations follow the same general enforcement rules. You can try to freeze bank accounts, seize assets, or file liens. However, LLCs sometimes have fewer formal records and may be more difficult to investigate, which can require extra effort.
If the company is inactive but still owns assets, you might be able to collect. You should also check whether the same people started a new company doing the same kind of work. In that case, you could potentially hold the new company responsible.
You have up to 20 years to enforce your judgment. However, after 10 years, specific tools (such as garnishments) may expire unless they are renewed. It’s best not to wait to start enforcement as soon as possible.
If the debtor refuses to answer questions or provide financial information, you can ask the court to enforce compliance. If they still don’t respond, the judge can impose penalties, such as fines or, in severe cases, arrest individuals responsible for the business.