How to Collect a Money Judgment from an Ex-Tenant
You may feel like celebrating after you win a money judgment for unpaid rent from an ex-tenant in court. But sometimes it can be tough to get the ex-tenant to pay you the amount of the judgment. Fortunately, if you know where the ex-tenant works, there’s a way you can get the money you’re owed. You can do this by garnishing the tenant’s wages. This means that you collect a certain percentage of the ex-tenant’s salary until the judgment is paid off. It’s one of the most effective tools you have to collect the money the tenant owes you, says New York attorney Mark Altschul.
Here are the basics on wage garnishment and the four steps you must take to garnish an ex-tenant’s wages.
Before you can garnish the ex-tenant’s wages, you must first have a court judgment that orders the ex-tenant to pay you money. Then you must fill out a legal form and give it to a city marshal to deliver—in legal terms, serve—to the ex-tenant’s employer.
Once the marshal serves the employer, the employer will take money from the ex-tenant’s paycheck and send you a check by way of the marshal. It’s illegal for the employer to ignore the garnishment form or to fire the ex-tenant because of it, says New York attorney Steven J. Antonoff.
Section 48-a of the state’s Personal Property Law limits the amount you can garnish to 10 percent of the ex-tenant’s monthly gross earnings or 25 percent of an ex-tenant’s disposable income. If the ex-tenant’s disposable income is less than 30 times minimum wage (federal or New York state minimum wage), it cannot be garnished at all.
Can You Do It Yourself?
It’s smart to use an attorney or a collection agency when you garnish an ex-tenant’s wages, says Altschul. A collections attorney should be familiar with the legal form you need to fill out and be in a better position to handle any problems that may arise. But it’s possible for you to take the steps needed to garnish a tenant’s wages yourself. Consider these factors in making your decision:
Size of your building(s). If your building is large or you own or manage many buildings, it’s probably cost-effective to use an attorney or collection agency.
Experience with other legal processes. If you’re accustomed to filling out legal papers—for example, you do your own nonpayment cases—you should be able to garnish wages yourself.
Is Garnishment Worth It?
Before filling out the garnishment form and paying the marshal’s fee, evaluate whether garnishment is worth your time and money, says Antonoff. With small judgments, it’s often not worth it. Figure out how much it will cost to garnish, including your time. If this amount exceeds the judgment, don’t garnish. Here are the factors to consider:
Amount of the judgment. There’s no minimum amount an ex-tenant must owe for you to garnish his wages, says Antonoff. But as a general rule, if the judgment is less than $500, it’s probably not worth it to garnish, says Altschul.
Ex-tenant’s income. Garnishment usually works best if the ex-tenant is in at least the middle-income range, says Altschul. Even if these tenants don’t have money in savings, they’re earning an income. Tenants who are poor may not have any income, or their income may fall below the minimum income limit for garnishing of wages.
Type of job. In some situations you can predict that the ex-tenant will quit the job once his salary is garnished, says Antonoff. For example, a restaurant busboy probably won’t stick around once his wages are garnished. Look at how long the ex-tenant has been at the job, the job’s skill level, and whether the nature of the job (e.g., easy to find) would make it more likely that the ex-tenant would leave.
Location of ex-tenant’s job. If the ex-tenant works outside New York City, you must take some extra steps before you can garnish his wages, says Antonoff. For example, you must file what’s known legally as the “transcript of judgment” in the county where the ex-tenant works.
FOUR BASIC GARNISHMENT STEPS
Here are the four basic steps you or your attorney need to take to garnish an ex-tenant’s wages.
Step #1: Get Form for Garnishing Wages
To garnish wages based on a court judgment against an ex-tenant, you must get a legal form called an “income execution,” says Antonoff. An income execution is a legal order that requires the ex-tenant’s employer to pay a portion of his gross wages to you for monies owed. Antonoff suggests ordering this from a legal stationary store or online at http://www.blumberglegalforms.com/forms/439.pdf.
Step #2: Fill Out Form
The form authorizes the employer to withhold money for you from the ex-tenant’s paycheck. You need the following information to fill out the form: the name and current address of the ex-tenant, the ex-tenant’s Social Security number, the name of the ex-tenant’s employer, and the amount of the judgment. All addresses on the form must be complete with the street and city.
Step #3: Give Income Execution Form to City Marshal
Give a copy of the completed form to a marshal and pay a fee. You can find a list of NYC marshals at http://www.nyc.gov/html/doi/html/marshals/list.shtml. With regard to fees, whenever a city marshal must travel within the City of New York to perform an official act, he or she is entitled to a Mileage Fee, currently $25, in advance. For an income execution, a marshal may take several separate actions, each involving a separate fee: (1) receiving, making a record of, and returning the Income Execution to court: $15, in advance; (2) service of the Income Execution upon the judgment debtor: $15, plus a Mileage Fee, if the ex-tenant is served in person, and the cost of postage, if service is made by mail, all in advance; (3) service upon the judgment on ex-tenant’s employer, if needed: $15, plus a Mileage Fee, if applicable, and the cost of postage, if applicable, all in advance.
The marshal must first send a copy of the form to the ex-tenant. Twenty days after sending the form to the ex-tenant, the marshal can deliver the form to the employer. The employer can respond by either:
- Agreeing to start garnishing the employee’s wages; or
- Stating why it can’t garnish the wages (e.g., the ex-tenant no longer works there; someone else is already garnishing the ex-tenant’s wages).
Step #4: Collect Money Each Month
If there’s no reason for not garnishing the wages, the employer should start to take the money out of the ex-tenant’s wages and send it to the marshal. The marshal will then give it to you. The marshal is entitled to 5 percent of what he collects from the employer. This fee is called poundage. But, notes Altschul, the tenant is responsible for paying this 5 percent. So it’s added on to the amount the tenant owes you.
For example, you garnish a money judgment of $1,000 from the tenant’s wages. The employer gives the marshal 10 percent, or $100, per month. The marshal will keep $5 of that $100 (5%). So the tenant will be credited with paying only $95 toward the total judgment amount that’s due.
What if the tenant tries to pay you the full amount of the judgment after getting the income execution form? Don’t accept the money directly from the tenant, advises Antonoff. Instead, tell the tenant to contact the marshal about paying the money. This way, the marshal can tell the tenant exactly how much he or she owes (including the marshal’s 5% fee). Also, the tenant, not you, will be responsible for paying that fee.
How to Track Down Ex-Tenant
To garnish an ex-tenant’s wages, you must find out where the ex-tenant works, if you don’t already know. You can use information from the ex-tenant’s lease application.
Employer and phone number. Call the most recent employer on the application and ask if the ex-tenant works there. If he doesn’t, ask for a forwarding telephone number. Be sure to get the full company name so that you have the correct formal name to put on the garnishment form.
Employment supervisor. A supervisor may have information on an ex-tenant that the human resources department doesn’t have.
Personal references and emergency contacts. Call the sources and ask in a polite tone where you can reach the ex-tenant. If the person asks who you are, you can identify yourself.
If all else fails and the money judgment is large enough to make it worthwhile, you can hire a private investigator to help you locate the tenant.