Increases penalties for failure to execute and file satisfied judgments of $5,000 or more with proper clerk

BILL NUMBER:S3133

Title of bill

An act to amend the civil practice law and rules, in relation to increasing penalties for failure to execute and file satis- fied judgments of $5,000 or more with the court clerk

Purpose or general idea of bill

This bill would increase the statutory damages (from $100 to $500) on creditors who do not execute and file satisfied judgments with the court clerk for judgments in excess of $5,000. The goal is to encourage individuals to file so that it will be less likely that someone will have false strikes on their credit report.

Summary of specific provisions

Section one amends subdivision (e) of section 5020 of the civil practice law and rules to raise the fine for failing to execute and file a satis- fied judgment with the proper clerk from one hundred to one thousand dollars.

Section two sets out the effective date.

Justification

This bill amends Civil Practice Law and Rules and affects every civil judgment. Under current law, an individual who receives a satisfied judgment from the court must file a satisfaction of judgment. Most entities such as credit card companies do this as a matter of standard business practice because such satisfactions (or lack thereof) are picked up by credit bureaus. If the entity does not file a satisfaction (even if they got one) and the credit bureau picks it up, then the credit rating of the individual involved in the dispute is affected.

At issue now is the fact that judgments in housing court and elsewhere are starting to be picked up by credit rating agencies, However, many landlords often fail to file a satisfaction of judgment and so judgments can end up on a tenant's credit report as unpaid, even if that is not true. This bad credit rating disproportionately affects low-income citi- zens because it means that they must pay more for things such as credit cards, car loans and mortgages.

This legislation will most likely affect housing disputes since most other businesses automatically file a satisfaction of judgment. The goal is to increase fines and therefore give landlords and other entities a greater incentive to remember to file satisfactions of judgment. This will result in a decrease in the number of individuals whose credit ratings are affected by a claimant's failure to file a satisfaction of judgment.

Fiscal implications

None.

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become a law.