§ 5222-A — Service of notices and forms and procedure for claim of exemption

§ 5222-a. Service of notices and forms and procedure for claim of\nexemption. (a) Applicability. Any person authorized under subdivision\n(a) of section fifty-two hundred twenty-two of this article issuing a\nrestraining notice affecting a natural person's account at a banking\ninstitution pursuant to such subdivision must comply with this section,\nin addition to the general provisions set forth in such section. Any\nsheriff levying against a natural person's account at a banking\ninstitution pursuant to section fifty-two hundred thirty-two of this\narticle must comply with this section, in addition to the general\nprovisions set forth in section fifty-two hundred thirty-two of this\narticle. The procedures set forth in subdivisions (b), (c), (d), (e),\n(f) and (g) of this section shall not apply where pursuant to\nsubdivision (h) and/or (i) of section fifty-two hundred twenty-two or\nsubdivision (e) of section fifty-two hundred thirty-two of this article,\nno funds in the account are restrained or levied upon.\n (b) Service of exemption notice and exemption claim form. 1. Service\nwith restraining notice upon banking institution. The person issuing the\nrestraining notice pursuant to subdivision (a) of section fifty-two\nhundred twenty-two of this article shall provide the banking institution\nwith the restraining notice, a copy of the restraining notice, an\nexemption notice and two exemption claim forms with sections titled\n"ADDRESS A" and "ADDRESS B" completed. The exemption notice and\nexemption claim forms shall be in the forms set forth in paragraph four\nof this subdivision. The notice and the forms shall be served on the\nbanking institution together with the restraining notice and copy of the\nrestraining notice. Service must be accomplished in accordance with\nsubdivision (a) or (g) of section fifty-two hundred twenty-two of this\narticle. Failure to serve the notice and forms together with the\nrestraining notice renders the restraining notice void, and the banking\ninstitution shall not restrain the account.\n 2. Service of execution by levy upon a garnishee banking institution.\nWhen serving an execution pursuant to subdivision (a) of section\nfifty-two hundred thirty-two of this article, the sheriff shall provide\nthe banking institution with an exemption notice and two exemption claim\nforms, which shall be in the forms set forth in paragraph four of this\nsubdivision. The sheriff shall serve both the exemption notice and the\nexemption claim forms on the banking institution together with the\nexecution notice. Service must be accomplished in accordance with\nsubdivision (a) of section fifty-two hundred thirty-two of this article.\nFailure to serve the notice and forms renders the execution void, and\nthe banking institution shall not levy upon the account.\n 3. Service upon judgment debtor. Within two business days after\nreceipt of the restraining notice or execution, exemption notice and\nexemption claim forms, the banking institution shall serve upon the\njudgment debtor the copy of the restraining notice, the exemption notice\nand two exemption claim forms. The banking institution shall serve the\nnotice and forms by first class mail to the last known address of the\njudgment debtor. The inadvertent failure by a depository institution to\nprovide the notice required by this subdivision shall not give rise to\nliability on the part of the depository institution.\n 4. Content of exemption notice and exemption claim form. a. The\nexemption notice shall be in the following form:\n "EXEMPTION NOTICE as required by New York Law\n YOUR BANK ACCOUNT IS RESTRAINED OR "FROZEN"\n The attached Restraining Notice or notice of Levy by Execution has\nbeen issued against your bank account. You are receiving this notice\nbecause a creditor has obtained a money judgment against you, and one or\nmore of your bank accounts has been restrained to pay the judgment. A\nmoney judgment is a court's decision that you owe money to a creditor.\nYou should be aware that FUTURE DEPOSITS into your account(s) might also\nbe restrained if you do not respond to this notice.\n You may be able to "vacate" (remove) the judgment. If the judgment is\nvacated, your bank account will be released. Consult an attorney\n(including free legal services) or visit the court clerk for more\ninformation about how to do this.\n Under state and federal law, certain types of funds cannot be taken\nfrom your bank account to pay a judgment. Such money is said to be\n"exempt."\n DOES YOUR BANK ACCOUNT CONTAIN ANY OF THE FOLLOWING TYPES OF FUNDS?\n 1. Social security;\n 2. Social security disability (SSD);\n 3. Supplemental security income (SSI);\n 4. Public assistance (welfare);\n 5. Income earned while receiving SSI or public assistance;\n 6. Veterans benefits;\n 7. Unemployment insurance;\n 8. Payments from pensions and retirement accounts;\n 9. Disability benefits;\n 10. Income earned in the last 60 days (90% of which is exempt);\n 11. Workers' compensation benefits;\n 12. Child support;\n 13. Spousal support or maintenance (alimony);\n 14. Railroad retirement;\n 15. Black lung benefits; and/or\n 16. COVID-19 stimulus relief for individuals and families with\nchildren.\n If YES, you can claim that your money is exempt and cannot be taken.\nTo make the claim, you must\n (a) complete the EXEMPTION CLAIM FORM attached;\n (b) deliver or mail the form to the bank with the restrained or\n"frozen" account; and\n (c) deliver or mail the form to the creditor or its attorney at the\naddress listed on the form.\n You must send the forms within 20 DAYS of the postmarked date on the\nenvelope holding this notice. You may be able to get your account\nreleased faster if you send to the creditor or its attorney written\nproof that your money is exempt. Proof can include an award letter from\nthe government, an annual statement from your pension, pay stubs, copies\nof checks, bank records showing the last two months of account activity,\nor other papers showing that the money in your bank account is exempt.\nIf you send the creditor's attorney proof that the money in your account\nis exempt, the attorney must release that money within seven days. You\ndo not need an attorney to make an exemption claim using the form."\n b. The exemption claim form shall be in the following form:\nNAME OF COURT, NAME OF COUNTY\n-------------------------------------x\nPLAINTIFF/PETITIONER/CLAIMANT INDEX NO.\nV.\nDEFENDANT/RESPONDENT EXEMPTION CLAIM FORM\n-------------------------------------x\nNAME AND ADDRESS OF JUDGMENT NAME AND ADDRESS OF FINANCIAL\nCREDITOR OR ATTORNEY INSTITUTION\n(To be completed by judgment (To be completed by judgment\ncreditor or attorney) creditor or attorney)\nADDRESS ADDRESS\nA_____________________ B______________________\n ____________________ _____________________\nDirections: To claim that some or all of the funds in your account are\nexempt, complete both copies of this form, and make one copy for\nyourself. Mail or deliver one form to ADDRESS A and one form to ADDRESS\nB within twenty days of the date on the envelope holding this notice.\n**If you have any documents, such as an award letter, an annual\nstatement from your pension, paystubs, copies of checks or bank records\nshowing the last two months of account activity, include copies of the\ndocuments with this form. Your account may be released more quickly.\n_________________________________________________________________________\nI state that my account contains the following type(s) of funds (check\nall that apply):\n____Social security\n____Social security disability (SSD)\n____Supplemental security income (SSI)\n____Public assistance\n____Wages while receiving SSI or public assistance\n____Veterans benefits\n____Unemployment insurance\n____Payments from pensions and retirement accounts\n____Income earned in the last 60 days (90% of which is exempt)\n____Child support\n____Spousal support or maintenance (alimony)\n____Workers' compensation\n____Railroad retirement or black lung benefits\n_____COVID-19 stimulus relief for individuals and families with children\n____Other (describe exemption):_________________________________\nI request that any correspondence to me regarding my claim be sent to\nthe following address:\n_____________________________________________________________________\n (FILL IN YOUR COMPLETE ADDRESS)\nI certify under penalty of perjury that the statement above is true to\nthe best of my knowledge and belief.\n_________________________________________________________________________\nDATE SIGNATURE OF JUDGMENT DEBTOR\n (c) Claim of exemption. 1. To claim an exemption pursuant to the\nprocedures in this section, the judgment debtor shall complete the\nexemption claim forms, sign them under penalty of perjury, and serve\nthem within twenty days of the date postmarked on the correspondence\ncontaining the notice and forms. The judgment debtor shall serve one\ncompleted exemption claim form on the banking institution and the other\non the attorney for the judgment creditor. In the event that there is no\nattorney for the judgment creditor, then the exemption claim form must\nbe served directly on the judgment creditor. The judgment debtor may\nserve the exemption claim forms in person or by first-class mail.\n 2. Where the banking institution receives an exemption claim form, it\nshall notify the judgment creditor forthwith of the date on which the\nfunds will be released pursuant to paragraph three of this subdivision.\n 3. The banking institution shall release all funds in the judgment\ndebtor's account eight days after the date postmarked on the envelope\ncontaining the executed exemption claim form mailed to the banking\ninstitution or the date of personal delivery of the executed exemption\nclaim form to the banking institution, and the restraint shall be deemed\nvoid, except where the judgment creditor interposes an objection to the\nexemption within that time.\n 4. Where the executed exemption claim form sent to the judgment\ncreditor is accompanied by information demonstrating that all funds in\nthe account are exempt, the judgment creditor shall, within seven days\nof the postmark on the envelope containing the exemption claim form and\naccompanying information, instruct the banking institution to release\nthe account, and the restraint shall be deemed void. Where the account\ncontains some funds from exempt sources, and other funds from unknown\nsources, the judgment creditor shall apply the lowest intermediate\nbalance principle of accounting and, within seven days of the postmark\non the envelope containing the exemption claim form and accompanying\ninformation, shall instruct the banking institution to release the\nexempt money in the account. The provisions of paragraph two of\nsubdivision (b) of rule twenty-one hundred three of this chapter shall\nnot enlarge the judgment creditor's time to move pursuant to this\nsection. Information demonstrating that funds are exempt includes, but\nis not limited to, originals or copies of benefit award letters, checks,\ncheck stubs or any other document that discloses the source of the\njudgment debtor's income, and bank records showing the last two months\nof account activity. If the judgment creditor fails to act in accordance\nwith this subdivision, the judgment creditor shall be deemed to have\nacted in bad faith and the judgment debtor may seek a court award of the\ndamages, costs, fees and penalties provided for in subdivision (g) of\nthis section.\n 5. If no claim of exemption is received by the banking institution\nwithin twenty-five days after the notice and forms are mailed to the\njudgment debtor, the funds remain subject to the restraining notice or\nexecution. Failure of the judgment debtor to deliver the executed\nexemption claim form does not constitute a waiver of any right to an\nexemption.\n (d) Objection to exemption claim and request for hearing. A judgment\ncreditor may object to the claim of exemption by moving for an order\npursuant to section fifty-two hundred forty of this article. The\njudgment creditor must serve the banking institution and the judgment\ndebtor with its motion papers within eight days after the date\npostmarked on the envelope containing the executed exemption claim form\nor the date of personal delivery of the executed exemption claim form to\nthe banking institution, and the provisions of paragraph one of\nsubdivision (b) of rule twenty-one hundred three of this chapter shall\nnot enlarge the judgment creditor's time to move pursuant to this\nsection. The judgment debtor shall be served at the address provided on\nthe exemption claim form. The affirmation or affidavit in support of the\nmotion shall demonstrate a reasonable belief that such judgment debtor's\naccount contains funds that are not exempt from execution and the amount\nof such nonexempt funds. The executed exemption claim form shall be\nattached to the affirmation or affidavit. The affirmation or affidavit\nshall not be conclusory, but is required to show the factual basis upon\nwhich the reasonable belief is based. The hearing to decide the motion\nshall be noticed for seven days after service of the moving papers. The\nexecuted exemption claim form shall be prima facie evidence at such\nhearing that the funds in the account are exempt funds. The burden of\nproof shall be upon the judgment creditor to establish the amount of\nfunds that are not exempt. The court shall, within five days of the\nhearing, issue an order stating whether or not funds in the account are\nexempt and ordering the appropriate relief. The judgment creditor or its\nattorney must serve the order on the banking institution and the\njudgment debtor no later than two business days after the court issues\nthe order.\n (e) Duties of banking institution if objection is made to exemption\nclaim. Upon receipt of a written objection pursuant to subdivision (d)\nof this section from the judgment creditor or its attorney within the\nspecified eight-day period, the banking institution shall retain the\nfunds claimed to be exempt for twenty-one days unless otherwise ordered\nby the court. If the period of twenty-one days expires and the banking\ninstitution has not been otherwise ordered by the court, the banking\ninstitution shall release the funds to the judgment debtor.\n (f) Release of funds. At any time during the procedure specified in\nthis section, the judgment debtor or the judgment creditor may, by a\nwriting dated after the service of the restraining notice, direct the\nbanking institution to release the funds in question to the other party.\nUpon receipt of a release, the banking institution shall release the\nfunds as directed.\n (g) Proceedings; bad faith claims. Where the judgment creditor objects\nto a claim of exemption pursuant to subdivision (d) of this section and\nthe court finds that the judgment creditor disputed the claim of\nexemption in bad faith, as provided in paragraph four of subdivision (c)\nof this section, the judgment debtor shall be awarded costs, reasonable\nattorney fees, actual damages and an amount not to exceed one thousand\ndollars.\n (h) Rights of judgment debtor. Nothing in this section shall in any\nway restrict the rights and remedies otherwise available to a judgment\ndebtor, including but not limited to, rights to property exemptions\nunder federal and state law.\n (i) The provisions of this section do not apply when the state of New\nYork, or any of its agencies or municipal corporations is the judgment\ncreditor, or if the debt enforced is for child support, spousal support,\nmaintenance or alimony, provided that the restraining notice contains a\nlegend at the top thereof, above the caption, in sixteen point bold type\nwith the following language: "The judgment creditor is the state of New\nYork, or any of its agencies or municipal corporations, AND/OR the debt\nenforced is for child support, spousal support, maintenance or\nalimony.".\n