Relates to notice of small claims judgments and indexing of unpaid claims

BILL NUMBER:S4306

Title of bill

An act to amend the New York city civil court act, the uniform city court act, the uniform district court act, the uniform justice court act and the tax law, in relation to notice of small claims judgments and indexing of unpaid claims

Purpose or general idea of bill

This bill provides for the interception of income tax refunds to satisfy an outstanding small claims judgment.

Summary of specific provisions

Sections 1-4 amend subdivision (a) of Section 1811 of the New York City Civil Court Act, the Uniform City Court Act, the Uniform District Court Act, and the Uniform Justice Court Act by adding a new paragraph 10 that adds the interception of any income tax refund owed pursuant to the Tax Law to the list of actions that a judgment debtor may be subject to for failure to satisfy a small claims judgment. In addition, these same sections of the bill also amend subdivision (b) of Section 1811 of the same court acts by adding a new paragraph 8 that includes in the notice of judgment sent to small claims judgment creditors the right of a claimant to initiate actions to recover the unpaid judgment through the interception of any income tax refund owed pursuant to the Tax Law.

Section 5 amends the Tax Law by adding a new Section 171-w that directs the Commissioner of Taxation and Finance to enter into an agreement with the Chief Administrator of the Courts to establish procedures for the interception of any income tax refund owed to a small claims judgment debtor, including penalties and attorney's fees, and payment of such refund to the judgment creditor.

Section 6 contains the effective date.

Justification

Winning a judgment in Small Claims Court is perhaps the easiest aspect of that judicial proceeding. Collecting on the judgment, however, often entails frustration and sometimes even futility. A number of actions to assist a judgment creditor in collecting are permitted in the various court acts named above. These include garnishment of wages and bank accounts, a lien on or seizure of personal property, and a seizure of real property, among others. This legislation now adds the interception of income tax refunds as an action that can be taken to try and make a judgment creditor whole.

Prior legislative history

S.6530 of 2014

Fiscal implications for state and local governments

None.

Effective date

Immediately.