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pastdue What You Should Do If a Debt Collection Law Firm Sues You

Thousands of New Yorker’s have fallen behind on paying their bills.  The New York Times reports that debt collection law firms have taken over the docket in New York Civil courts demanding repayment. In New York County, there are two courtrooms devoted to debt collection lawsuits.

The Times highlights the role of Cohen & Slamowitz, a Woodbury, N.Y. law firm.  The firm has been filing roughly 80,000 (wow!) lawsuits a year with only 14 lawyers.  Because debt collection law firms often do not have enough staff to vet their cases, the basis of many lawsuits is improper. In my experience, many debt collection lawsuits have incorrect information about the debtor and the amount in dispute.

Credit card companies have increasingly sold off debt to debt buyers. They sell the debt in bulk, usually for 5 cents or less on the dollar.  The  new owners of the debt then hire a law firm and then attempt to collect on the debt.  The law firms are hoping that people fail to answer the lawsuit and try to collect on a default judgment.

If you have been sued as a result of an alleged debt you should:

  • Read the papers that are given to you to find out the party that is suing you.  Do you have any relationship with the business suing you?
  • What are you being sued for? Is it a credit card debt?
  • Ask for verification of the debt. Make the law firm provide paperwork proving that you owe the debt. Often they are unable to come up with it.
  • When was the lawsuit filed? Depending how you have been served, you must provide an answer within 20 or 30 days.
  • Has the debt been resold? If the debt has been resold to a company that is located outside New York, it is unlikely that they will be able to provide a witness at trial. Even if the debt is valid, they will be unable to prove it and you will win.
  • Where are you being sued?  If you are a New York resident and the lawsuit is in New Jersey, they do not have proper jurisdiction over you and you can have your case dismissed.

If you have beens sued in New York for a debt, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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1 judgment1 What are the Sheriff Fees for Enforcing a Judgement in New York?

If you obtain a judgment or a court order, the Sheriff is in charge for  - Enforcing Judgments & Court Orders. Listed below is information from the New York County Sheriff’s office regarding enforcement.

Property and Income Executions, Order of Attachment, Order of Seizure, et. al.
The Sheriff often works with litigants (including City agencies) who have court orders that awards them property and/or income. They are entitled to this property or income if it is not voluntarily surrendered by the other party in a court action.

Fee Schedule for Collection of Money

A service fee of five percent is charged in collection cases  from an execution or attachment. However, this is usually added to the judgment debtor’s payment, not deducted from the creditor’s award.

For example, if a judgment debtor owes $100, the five percent fee will be $5. The Sheriff will collect $105 from the debtor, so the creditor receives the full $100 to which he or she is entitled.

Property Execution


The purpose or function of the property execution is to satisfy a judgment by seizing property. In most cases the judgment will be for money owed. The Sheriff will either seize cash, personal property or real property, or conduct a public auction to convert the property to cash. Although we are essentially acting as agents for the judgment creditor in the action, our activities will be performed in a neutral, unbiased manner.  The Sheriff seizes only property the debtor has an interest in.

Property Execution Fees
$40.00
Each additional defendant: $15.00

Income Execution

An income execution is an enforcement issued by the judgment creditor’s attorney as an officer of the court, or the court clerk, directing the Sheriff to satisfy a money judgment from the  debtor’s income. The debtor’s earnings and State and Federal rules for payment, calculation and regulation determine the amount of each payment. Payments may be paid, voluntarily or involuntarily, to the Sheriff through payroll deductions. Income executions, which are not paid voluntarily, are served second stage on the debtor’s employer.  In a second stage service, the proper amount of money is seized from the debtor’s pay. The employer is required to forward this specific amount to the Sheriff for application to the account.

Income Execution Fees
Debtor: $30.00
Employer: * $30.00
* If the money is not recovered from the debtor, the debtor’s employer is served, and the debtor’s salary is garnisheed.

The purpose of an attachment is to seize and encumber property, which may be used to satisfy a judgment. Personal and real property can be attached and liquidated to satisfy a money judgment.

The above process is a “provisional remedy.” Anlthough the attachment is ordered by the court, it is also pre-final judgment. Any property seized is taken into the Sheriff’s custody and held until the court orders the final disposition.

Attachment Fees
$80.00
Each additional defendant: $55.00
Received and Levy: $40.00

Each Additional Levy Fee
Serve Defendant: $15.00
Mileage: $25.00

Order of Seizure
An order of seizure is used to seize specific personal property items when ownership and possession is disputed. A final judgment will usually direct the disposition of the property to a specified party,

The above process is a “provisional remedy.” Although the seizure is ordered by the court, it is also pre-final judgment. Any property seized is taken into the Sheriff’s custody and held until the court orders the final disposition.Property Seizure Fee
$116.50

Additional Fees - Against Secondary Defendant or Party
Executing against additional defendant or party: $55.00
Serving an additional defendant not in possession: $15.00
Summons filed w/Order of Seizure for each defendant: $15.00

If you have a question about collecting a judgment, contact me at the Law Office of Frederic R. Abramson at 212-233-0666

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Wage Garnishment: The Hidden Danger of Credit Card Default

by Fred Abramson April 5, 2010 Business Law

Share The New York Times reports today that more struggling borrowers are facing wage garnishment than ever before. Because many credit card borrowers decide not to defend their case in court, creditors can win big judgments in court. I recently wrote an article outlining what you should legally do if your wages have been garnished. [...]

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What Litigation Costs and Expenses are Recoverable in NY? How about Attorney Fees?

by Fred Abramson March 19, 2010 Business Law

Share Nearly every lawsuit asks for recovery of attorney fees, costs and expenses for bringing the action.  When potential clients contact my office for the first time for a civil litigation matter, the most common question asked is whether attorney fees are recoverable. Attorney fees are generally not recoverable.  There are exceptions to this rule, such as when [...]

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Breach of Contract Lawsuit in New York: Quick guide to steps

by Fred Abramson May 18, 2009 Business Law

The web designer that you hired failed to deliver the new web 2.0 apps on your website as agreed to in your written contract. In the alternative, you have been sued by a customer because they were not happy with the materials that you supplied. Should you call a lawyer and either start or defend a lawsuit? Below, is quick guide that summarizes the basic steps, legal process and expenses to breach of contract lawsuit.

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You Just Got Sued. Now What?

by Fred Abramson April 2, 2009 Business Law

Share You are sitting in your office on the busiest day of the year, and just when you think nothing else could go wrong, a person walks in and utters the fateful words “You’ve been served”, while handing you a stack of papers.   You have just been sued.  What is the best course of action [...]

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Tips for collecting money from companies that may no longer exist

by Fred Abramson March 18, 2009 Business Law

Share Just because you entered into a valid contract with a company does not mean that your contract is secure. According to Crain’s New York Business, more companies are going out of business than ever before. Many are doing so without any notice. Bankruptcy filings alone have tripled in the last year. You contact the [...]

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