I received a Wage Garnishment Notice, what do I do?

Wage garnishment is a result of legal involuntarily collection used by many creditors in New York. If your wages are being garnished, it can be a shock to most people. In New York creditors with a valid judgment can, via a Marshall take up to 10% of your gross income right out of your paycheck. More often than not, people don’t realize how this can happen.

In New York, for a creditor to involuntarily collect on a debt, there has to be a valid civil court judgment. For a creditor to obtain a judgment they must file a suit against the Defendant, usually this suit is filed where the Defendant resides. Once the suit is filed then the Plaintiff (party suing the Defendant) must serve the Defendant with a Summons & Complaint within 120 days of filing the case. Once properly served the Defendant has 20 days or 30 days to respond. If they fail to respond, then the Plaintiff requests the court to grant a default judgment pursuant to the New York Civil Procedure Law.

How Can I be Served?

There are several different ways that you can be served with a lawsuit. The first is personal service, this is when the process server confirms your identity as the Defendant and actually hands the papers to you. Personal service is not all that common. The next type of service is called substituted service, where the process server serves another person at your residence or they attempt personal service and then leave the papers at your door in addition to mailing a copy. The process server will then file an Affidavit of Service with the court, in this document the process server attests to the fact that they gave you the papers. The difference between these two types of service is the time in which you have to respond. If you’re served personally then you have 20 days to respond, if your served by any other means, you have 30 days.

If you received a garnishment notice, then the 20 or 30 days have elapsed. Now the creditor has a judgment and has the legal right to collect involuntarily, which can mean wage garnishment. Even if you receive this notice you may have some options. It’s possible that you weren’t served properly. You can’t respond to something you never received, right? You will need to file something with the court called an Order to Show Cause (OTSC).

What is an Order to Show Cause?

In this OTSC you will need to explain why you think the court should vacate or remove the judgment against you. These reasons are:

  • Invalid Personal Jurisdiction (bad service)
    • You must be given the papers correctly. Some examples of bad service are:
      • No one tried to serve you personally;
      • You were served by the person suing you;
      • The papers were served to someone who was not likely to give them to you.
    • If you claim bad service, the court will set what is called a “traverse hearing” where you will have to prove the bad service.
  • Excusable Default
    • That you had a good reason to not respond, such as you were out of town when the papers were delivered, family illness, you couldn’t take off work, etc.

Once your OTSC has been filed with the court, the judge will have to sign off on it and set a hearing date. At this hearing, you will have to explain to the judge or court attorney why you believe the default judgment should be set aside. The decision is up to the individual judge, most judges in New York are debtor friendly and usually grant the OTSC to vacate the default judgment.

Conclusion

If you are not familiar with the legal process, drafting and filing these papers can be a bit overwhelming. It is always best to consult with an attorney that has experience defending these types of cases. The bottom line is, if you are getting garnished, you don’t need to give up.  You still may have options to remove the judgment, and set up voluntary payments which can make things easier on you and your family.

 

The above post was written by Joshua C. Sibenik, Esq.

So there has been a Default Judgment entered against you, now what?

First off, you are not alone. In New York City alone there are hundreds of default judgments entered every month. When dealing with a default judgment time is of the essence so you should act fast in order to avoid potential executions; which include wage garnishments, bank levies, placing liens on real estate and vehicles.

The Law: CPLR §3215

In New York, CPLR §3215 is the law that governs default judgments. CPLR §3215(a) states:

When a defendant has failed to appear, plead or proceed to trial of an action reached and called for trial, or when the court orders a dismissal for any other neglect to proceed, the plaintiff may seek a default judgment against him.

CPLR §3215 is much longer and more complex than what is included above, but for our purposes the above section will work.

How Did This Happen To You?

In order for a default judgment to be entered against you in New York, you must have had a lawsuit filed against you. Once a lawsuit is filed, New York State Law requires that the Plaintiff, the party suing you, serve you with notice of the law suit; either a Summons with Notice or a Summons and Complaint. Once served, New York Law only gives the defendant a limited amount of time to responded, a/k/a appear or answer, the lawsuit. The manner in which you are served will determine how much time you have to respond to the lawsuit. If you are served personally, you have 20 days to respond, but if you are served though substituted service, which is more common, you have 30 days to respond.

Don’t Think That You Were Ever Served With Notice Of The Lawsuit?

It is more common than you would think and we hear this very often when potential clients contact our office. How is this possible? For more information on this topic check out our firm’s blog post: I Was Never Handed the Summons, So How Was I Served?

What Can You Do Now That There Is a Default Judgment Entered Against You?

As mentioned above, time is of the essence because the longer that the default judgment has been entered the more difficult it can be to challenge the default. According to CPLR §317:

…..[A Defendant] may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment, but in no event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense………………………………………………………………………………

As you can see above if the default judgment in 5 or more years old it will be extremely difficult, if not impossible, to vacate or remove.

Motion to Vacate a Default Judgment:

Filing a Motion to Vacate a Default Judgment is one way to remove the default. If the Motion is granted the case will be returned to the Court’s calendar; granting you the ability to raise defenses and defend yourself against the Plaintiff. Filing a Motion to Vacate a Default Judgment is complicated and it is in your best interest to contact an attorney to do so.

CPLR § 5015(b)

Under CPLR § 5015(b), parties can stipulate, aka agree, to vacate a default judgment upon consent of each party to the suit. This sounds like a great option, and it some cases, it can be! Although, in our experience, a lot of Plaintiff’s Attorneys will not agree to do so under normal circumstances, but an experienced attorney might be able to negotiate this on your behalf!

Settle the Case

Often times if the lawsuit is a consumer credit case, i.e. the Plaintiff is alleging that you owe money for a credit card, rent, store card, etc. they might be willing to withhold executing on the default judgment if there is a settlement in place. In most cases the settlement would consist of the defendant paying the plaintiff in a lump sum or on a monthly basis. Then, once the settlement terms are satisfied, the plaintiff will inform the court. Negotiating a settlement when a default judgment has been entered can be difficult because the Plaintiff usually believes that they have the upper hand.

Conclusion

Just because you have a default judgment entered against you doesn’t mean that you are out of options, but your time is limited. If you find out that there has been a default judgment entered against you should take action immediately to, hopefully, avoid executions against your assets. An experienced attorney can let you know all your options and help you decide what option is best for your situation.

I Think That A Business Has Taken Advantage of Me, Is There Anything I Can Do? – New York’s Consumer Protection Laws – N.Y. GBL § 349 & N.Y. GBL § 350

INTRO

If you believe that business has taken advantage of you then you may have a cause of action against that business! New York State, like many others, has enacted laws to protect consumers against predatory and/or deceptive business practices.  In New York, businesses are held to a high standard when dealing with consumers.

THE LAWS

N.Y. GBL § 349

New York General Business Law § 349 aka N.Y. GBL § 349: protects consumers against a business’s deceptive acts and unlawful practices. Section (a) of GBL § 349 states that “Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.” Although, the law seems to be pretty straight forward there have been many cases and court opinions defining GBL § 349.

According to Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (N.Y. 2000), In order to prevail on a claim for a Violation of N.Y. G.B.L. § 349, a Plaintiff must establish: (a) that the Defendant’s act was consumer oriented; (b) that the Defendant’s act was misleading, and (c) that the Plaintiff was injured as a result.

N.Y. GBL § 350

New York General Business Law § 350 aka N.Y. GBL § 350 prevents business from using false advertising. GBL § 350 states that: “False advertising in the conduct of any business, trade or commerce or in the furnishing of any service in this state is hereby declared unlawful.” According to GBL § 350  “The term ‘false advertising’ means advertising, including labeling, of a commodity, or of the kind, character terms or conditions of any employment opportunity if such advertising is misleading in a material respect.”

In order to prevail on a claim for a Violation of N.Y. G.B.L. § 350, a Plaintiff must establish: (a) that the Defendant’s advertisement was consumer oriented; (b) that the Defendant’s advertisement was misleading in a material respect; (c) Plaintiff was injured, and; (d) Plaintiff relied on the misleading advertisement.

What Does This Mean For You?

As discussed above New York’s consumer protection laws were enacted to protect consumers and deceitful business practices and false advertising. If you believe that you have fallen victim to such unlawful business practices you could be entitled to damages and attorney’s fees.

Under GBL § 349 the Court may increase the damages if a defendant/business willfully or knowingly violated GBL § 349. Additionally, the Court may award reasonable attorney’s fees to prevailing plaintiff under GBL  § 349(h).

Under GBL § 350 Court may increase the award of damages to an amount up to three times the actual damages up to $10,000, if the defendant/business willfully or knowingly violated the this section. Additionally, the Court may award reasonable attorney’s fees to prevailing plaintiff according to N.Y. GBL § 350(e).

CONCLUSION

New York State takes consumer protection very seriously and if you think that a business has taken advantage of you there are remedies available to you and an experienced attorney can help you determine whether or not you have a cause of action under New York General Business Law § 349 and/or New York General Business Law § 349.