S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5724--A
     Cal. No. 1003
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 17, 2021
                                ___________
 
 Introduced  by  Sens.  THOMAS,  BIAGGI,  BROOKS,  KRUEGER, MYRIE, RAMOS,
   RIVERA, SEPULVEDA -- read twice and ordered printed, and when  printed
   to  be  committed  to the Committee on Judiciary -- reported favorably
   from said committee, ordered to first and second report, ordered to  a
   third  reading,  amended and ordered reprinted, retaining its place in
   the order of third reading
 
 AN ACT to amend the civil practice law and rules,  in  relation  to  the
   rate of interest applicable to money judgments arising out of consumer
   debt
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 5004 of  the  civil  practice  law  and  rules,  as
 amended  by  chapter  258  of  the  laws  of 1981, is amended to read as
 follows:
   § 5004. Rate of interest. (A) Interest shall be at the  rate  of  nine
 per  centum  per  annum,  except  where  otherwise  provided by statute;
 PROVIDED THE ANNUAL RATE OF INTEREST TO BE PAID IN AN ACTION ARISING OUT
 OF A CONSUMER DEBT WHERE A NATURAL PERSON IS A DEFENDANT  SHALL  BE  TWO
 PER  CENTUM  PER  ANNUM (I) ON A JUDGMENT OR ACCRUED CLAIM FOR JUDGMENTS
 ENTERED ON OR AFTER THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO
 THOUSAND TWENTY-ONE WHICH AMENDED THIS SECTION, AND  (II)  FOR  INTEREST
 UPON  A JUDGMENT PURSUANT TO SECTION FIVE THOUSAND THREE OF THIS ARTICLE
 FROM THE DATE OF THE ENTRY OF JUDGMENT ON ANY PART OF A JUDGMENT ENTERED
 BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE  LAWS  OF  TWO  THOUSAND
 TWENTY-ONE  WHICH  AMENDED THIS SECTION THAT IS UNPAID AS OF SUCH EFFEC-
 TIVE DATE.
   (B) FOR THE PURPOSE OF THIS SECTION "CONSUMER DEBT"  MEANS  ANY  OBLI-
 GATION   OR   ALLEGED   OBLIGATION   OF  ANY NATURAL PERSON TO PAY MONEY
 ARISING OUT OF A TRANSACTION IN WHICH THE MONEY, PROPERTY, INSURANCE  OR
 SERVICES  WHICH  ARE  THE  SUBJECT  OF THE TRANSACTION ARE PRIMARILY FOR
 PERSONAL,  FAMILY  OR HOUSEHOLD PURPOSES, WHETHER OR NOT SUCH OBLIGATION
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD00043-14-1

 S. 5724--A                          2
 
 HAS  BEEN REDUCED TO JUDGMENT, INCLUDING, BUT NOT LIMITED TO, A CONSUMER
 CREDIT TRANSACTION, AS DEFINED IN SUBDIVISION (F) OF SECTION ONE HUNDRED
 FIVE OF THIS CHAPTER.
   (C)  THIS  SECTION  DOES  NOT  AFFECT OR CREATE ANY RIGHTS OR REMEDIES
 RELATED TO ANY AMOUNTS PAID PRIOR TO THE EFFECTIVE DATE OF THIS SUBDIVI-
 SION, INCLUDING AMOUNTS PAID TO SATISFY JUDGMENTS OR TO ACCRUED INTEREST
 OR FEES PAID, OR WITH RESPECT TO JUDGMENTS SATISFIED PRIOR TO THE EFFEC-
 TIVE DATE OF THIS SUBDIVISION. FOR AMOUNTS PAID PRIOR TO  THE  EFFECTIVE
 DATE OF THIS SUBDIVISION AND LAWFULLY APPLIED IN SATISFACTION OR PARTIAL
 SATISFACTION  OF INTEREST OR FEES ACCRUED PRIOR TO THE EFFECTIVE DATE OF
 THIS SUBDIVISION, THIS SECTION SHALL NOT BE CONSTRUED TO REQUIRE A JUDG-
 MENT CREDITOR OR SHERIFF TO (I) RETURN OR REFUND SUCH AMOUNTS  TO  JUDG-
 MENT DEBTORS; OR (II) APPLY SUCH PAYMENTS TO SATISFY ANY PART OF A MONEY
 JUDGMENT  OTHER  THAN FEES OR INTEREST UPON JUDGMENT PURSUANT TO SECTION
 FIVE THOUSAND THREE OF THIS ARTICLE.
   (D) IF ANY WORD, PHRASE, CLAUSE, SENTENCE, PARAGRAPH, SUBDIVISION,  OR
 PART OF THIS SECTION OR ITS APPLICATION TO ANY PERSON OR CIRCUMSTANCE IS
 HELD  INVALID BY ANY COURT OF COMPETENT JURISDICTION AFTER EXHAUSTION OF
 ALL FURTHER JUDICIAL REVIEW, THE INVALIDITY SHALL NOT AFFECT, IMPAIR, OR
 INVALIDATE THE REMAINDER OF THIS SECTION OR APPLICATIONS OF THIS ARTICLE
 WHICH CAN BE GIVEN EFFECT WITHOUT THE INVALID PROVISION OR  APPLICATION,
 AND TO THIS END THE PROVISIONS OF THIS SECTION ARE SEVERABLE.
   §  2.  Subdivisions  (f) and (i) of section 3215 of the civil practice
 law and rules, subdivision (f) as amended by chapter 453 of the laws  of
 2006,  and  subdivision (i) as amended by chapter 31 of the laws of 1967
 and relettered by chapter 255 of the laws of 1992, are amended  to  read
 as follows:
   (f)  Proof.  On any application for judgment by default, the applicant
 shall file proof of service of the  summons  and  the  complaint,  or  a
 summons  and  notice  served  pursuant to subdivision (b) of rule 305 or
 subdivision (a) of rule 316 of this chapter,  and  proof  of  the  facts
 constituting  the  claim,  the default and the amount due, INCLUDING, IF
 APPLICABLE, A STATEMENT THAT THE INTEREST RATE FOR CONSUMER DEBT  PURSU-
 ANT  TO SECTION FIVE THOUSAND FOUR OF THIS CHAPTER APPLIES, by affidavit
 made by the party, or where the state of New York is the  plaintiff,  by
 affidavit  made  by  an attorney from the office of the attorney general
 who has or obtains knowledge of  such  facts  through  review  of  state
 records or otherwise. Where a verified complaint has been served, it may
 be  used  as  the  affidavit of the facts constituting the claim and the
 amount due; in such case, an affidavit as to the default shall  be  made
 by  the  party or the party's attorney. When jurisdiction is based on an
 attachment of property, the  affidavit  must  state  that  an  order  of
 attachment  granted in the action has been levied on the property of the
 defendant, describe the property and state its value. Proof  of  mailing
 the  notice  required by subdivision (g) of this section, where applica-
 ble, shall also be filed.
   (i) Default judgment for failure to comply with stipulation of settle-
 ment. 1. Where, after  commencement  of  an  action,  a  stipulation  of
 settlement  is  made,  providing, in the event of failure to comply with
 the stipulation, for entry without further notice of  a  judgment  in  a
 specified  amount  with interest, if any, from a date certain, the clerk
 shall enter judgment on the stipulation and an affidavit as to the fail-
 ure to comply with the terms thereof, together with  a  complaint  or  a
 concise  statement  of  the  facts on which the claim was based, AND, IF
 APPLICABLE, A STATEMENT THAT THE INTEREST RATE FOR CONSUMER DEBT  PURSU-
 ANT TO SECTION FIVE THOUSAND FOUR OF THIS CHAPTER APPLIES.

 S. 5724--A                          3
 
   2. Where, after commencement of an action, a stipulation of settlement
 is  made,  providing,  in the event of failure to comply with the stipu-
 lation, for entry without further notice of a  judgment  dismissing  the
 action, the clerk shall enter judgment on the stipulation and an affida-
 vit  as  to  the failure to comply with the terms thereof, together with
 the pleadings or a concise statement of the facts on which the claim and
 the defense were based.
   § 3. Paragraph 1 of subdivision (a) of section 3218 of the civil prac-
 tice law and rules, as amended by chapter 214 of the laws  of  2019,  is
 amended to read as follows:
   1.  stating the sum for which judgment may be entered, authorizing the
 entry of judgment, [and] stating the county where the defendant  resides
 AND,  IF  APPLICABLE,  STATING  THAT THE INTEREST RATE FOR CONSUMER DEBT
 PURSUANT TO SECTION FIVE THOUSAND FOUR OF THIS CHAPTER APPLIES;
   § 4. Subdivisions (a) and (b) of section 5230 of  the  civil  practice
 law  and  rules, subdivision (a) as amended by chapter 24 of the laws of
 2009 and subdivision (b) as amended by chapter 59 of the laws  of  1993,
 are amended to read as follows:
   (a)  Form.  An  execution  shall specify the date that the judgment or
 order was entered, the court in which it was entered, the amount of  the
 judgment or order, THE APPLICABLE INTEREST RATE AND THE DATE AS OF WHICH
 THE  NEW  INTEREST  RATE  APPLIES IF THE INTEREST RATE FOR CONSUMER DEBT
 PURSUANT TO SECTION FIVE THOUSAND FOUR OF THIS CHAPTER APPLIES  and  the
 amount  due  thereon  and  it  shall specify the names of the parties in
 whose favor and against whom the judgment or order was entered.  IF  THE
 APPLICABLE  INTEREST RATE CHANGES PURSUANT TO SECTION FIVE THOUSAND FOUR
 OF THIS CHAPTER WHILE AN EXECUTION IS  ONGOING,  THE  JUDGMENT  CREDITOR
 SHALL ISSUE AN AMENDED EXECUTION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE
 OF THE CHAPTER OF THE LAWS OF TWO THOUSAND TWENTY-ONE WHICH AMENDED THIS
 SUBDIVISION,  EFFECTIVE  AS OF THE DATE OF THE RATE CHANGE. An execution
 shall direct that only the property in which a named judgment debtor  or
 obligor  who  is  not deceased has an interest, or the debts owed to the
 named judgment debtor or obligor, be levied upon or sold thereunder  and
 shall specify the last known address of that judgment debtor or obligor.
 Except  in  cases  when the state of New York, or any of its agencies or
 municipal corporations is the judgment creditor, or if the debt enforced
 is for child support, spousal support, maintenance or alimony,  provided
 that in those instances the execution contains a legend at the top ther-
 eof,  above  the  caption, in sixteen point bold type with the following
 language: "The judgment creditor is the state of New York, or any of its
 agencies or municipal corporations, AND/OR  the  debt  enforced  is  for
 child  support,  spousal support, maintenance or alimony.", an execution
 notice shall state that, pursuant to subdivision (l) of  section  fifty-
 two  hundred  five of this article, two thousand five hundred dollars of
 an account containing direct deposit or electronic  payments  reasonably
 identifiable as statutorily exempt payments, as defined in paragraph two
 of subdivision (l) of section fifty-two hundred five of this article, is
 exempt  from  execution  and  that  the  garnishee  cannot  levy upon or
 restrain two thousand five hundred dollars in such an account. Except in
 cases when the state of New York, or any of its  agencies  or  municipal
 corporations  is  the  judgment creditor, or if the debt enforced is for
 child support, spousal support, maintenance or alimony, provided that in
 those instances the execution contains a  legend  at  the  top  thereof,
 above  the  caption,  in  sixteen  point  bold  type  with the following
 language: "The judgment creditor is the state of New York, or any of its
 agencies or municipal corporations, AND/OR  the  debt  enforced  is  for

 S. 5724--A                          4
 
 child  support,  spousal support, maintenance or alimony.", an execution
 notice shall likewise state that pursuant to subdivision (i) of  section
 fifty-two  hundred  twenty-two  of  this article, an execution shall not
 apply  to  an amount equal to or less than ninety percent of the greater
 of two hundred forty times the federal minimum hourly wage prescribed in
 the Fair Labor Standards Act of 1938 or  two  hundred  forty  times  the
 state minimum hourly wage prescribed in section six hundred fifty-two of
 the  labor law as in effect at the time the earnings are payable, except
 such part as a court determines to be  unnecessary  for  the  reasonable
 requirements of the judgment debtor and his or her dependents. Where the
 judgment  or order was entered in a court other than the supreme, county
 or a family court, the execution shall also specify the date on which  a
 transcript  of  the  judgment  or  order was filed with the clerk of the
 county in which the judgment was  entered.  Where  jurisdiction  in  the
 action  was based upon a levy upon property or debt pursuant to an order
 of attachment, the execution shall also state that  fact,  describe  all
 property  and  debts levied upon, and direct that only such property and
 debts be sold thereunder. Where the judgment or order was recovered  for
 all  or  part  of a mortgage debt, the execution shall also describe the
 mortgaged property, specify the book and  page  where  the  mortgage  is
 recorded,  and  direct  that no part of the mortgaged property be levied
 upon or sold thereunder.
   (b) Issuance. At any time before a judgment or order is  satisfied  or
 vacated, an execution may be issued from the supreme court, county court
 or a family court, in the county in which the judgment was first docket-
 ed,  by the clerk of the court or the attorney for the judgment creditor
 as officer of the court, to the sheriffs of one or more counties of  the
 state,  directing  each  of them to satisfy the judgment or order out of
 the real and personal property of the judgment debtor or obligor and the
 debts due to him or her.  PROVIDED, HOWEVER, IF THE APPLICABLE  INTEREST
 RATE  CHANGES  PURSUANT  TO  SECTION  FIVE THOUSAND FOUR OF THIS CHAPTER
 WHILE AN EXECUTION IS ONGOING, THE CLERK OF THE  COURT  OF  THE  SUPREME
 COURT,  COUNTY COURT OR A FAMILY COURT, IN THE COUNTY IN WHICH THE JUDG-
 MENT WAS FIRST DOCKETED, OR THE ATTORNEY FOR THE  JUDGMENT  CREDITOR  AS
 OFFICER  OF THE COURT, SHALL BE AUTHORIZED TO ISSUE AN AMENDED EXECUTION
 TO THE SHERIFFS OF ONE OR MORE COUNTIES OF THE STATE AND SHALL ISSUE  AN
 AMENDED EXECUTION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THE CHAPTER
 OF  THE  LAWS OF TWO THOUSAND TWENTY-ONE WHICH AMENDED THIS SUBDIVISION,
 EFFECTIVE AS OF THE DATE OF THE RATE CHANGE. Where the judgment or order
 is for support and is payable to the support collection unit  designated
 by  the appropriate social services district, such unit shall be author-
 ized to issue the execution and to satisfy the judgment or order out  of
 the real and personal property of the judgment debtor or obligor and the
 debts due to him or her.
   §  5.  Subdivisions (a), (d), (j) and (k) of section 5231 of the civil
 practice law and rules, subdivisions (a), (d)  and  (j)  as  amended  by
 chapter  550  of the laws of 2015, subdivision (k) as amended by chapter
 241 of the laws of 1986 and as relettered by chapter 829 of the laws  of
 1987, are amended to read as follows:
   (a)  Form.  An  income  execution  shall  specify,  in addition to the
 requirements of subdivision (a) of section 5230[,]:  (I)  the  name  and
 address of the person or entity from whom the judgment debtor is receiv-
 ing  or  will  receive money; (II) the amount of money, the frequency of
 its payment and the amount of the installments to  be  collected  there-
 from; and (III) shall contain a notice to the judgment debtor that he or
 she  shall commence payment of the installments specified to the sheriff

 S. 5724--A                          5
 
 forthwith and that, upon his or  her  default,  the  execution  will  be
 served  upon  the  person  or entity from whom he or she is receiving or
 will receive money. PROVIDED,  HOWEVER,  THAT  IF  A  JUDGMENT  CREDITOR
 ISSUES  AN  AMENDED  EXECUTION  PURSUANT  TO  SECTION  FIVE THOUSAND TWO
 HUNDRED THIRTY OF THIS ARTICLE  BECAUSE  THE  APPLICABLE  INTEREST  RATE
 CHANGES  PURSUANT  TO  SECTION  FIVE  THOUSAND FOUR OF THIS CHAPTER, THE
 INCOME EXECUTION NEED ONLY SPECIFY  PARAGRAPHS  (I)  AND  (II)  OF  THIS
 SUBDIVISION.
   (d)  Service upon debtor; first service by sheriff. Within twenty days
 after an income execution is delivered to the sheriff, the sheriff shall
 serve a copy of it upon the judgment debtor, in the  same  manner  as  a
 summons  or, in lieu thereof, by certified mail return receipt requested
 provided an additional copy is sent by regular mail to  the  debtor.  If
 service  is  by  mail  as  herein provided, the person effecting service
 shall retain the receipt together with  a  post  office  certificate  of
 mailing  as proof of such service. PROVIDED, HOWEVER, THAT IF A JUDGMENT
 CREDITOR ISSUES AN AMENDED EXECUTION PURSUANT TO SECTION  FIVE  THOUSAND
 TWO  HUNDRED THIRTY OF THIS ARTICLE BECAUSE THE APPLICABLE INTEREST RATE
 CHANGES PURSUANT TO SECTION FIVE THOUSAND  FOUR  OF  THIS  CHAPTER,  THE
 SHERIFF  SHALL  SERVE  A  COPY OF THE INCOME EXECUTION WITHIN FORTY-FIVE
 DAYS AFTER AN INCOME EXECUTION IS DELIVERED TO THE SHERIFF.
   (j)  Priority;  delivery  to  another  sheriff.  Two  or  more  income
 executions  issued against the same judgment debtor, specifying the same
 person or entity from whom the money is received and  delivered  to  the
 same  or  different  enforcement officers shall be satisfied out of that
 money in the order in which the executions are delivered to  an  officer
 authorized  to  levy  in  the  county,  town or city in which the debtor
 resides or, in any county in which the person or entity  from  whom  the
 judgment  debtor  is  receiving  or  will receive money has an office or
 place of business, or where the judgment debtor is a  non-resident,  the
 county,  town  or city in which he or she is employed. IF THE APPLICABLE
 INTEREST RATE CHANGES PURSUANT TO SECTION FIVE  THOUSAND  FOUR  OF  THIS
 CHAPTER  WHILE  AN  EXECUTION  IS  ONGOING,  THE ISSUANCE OF THE AMENDED
 EXECUTION PURSUANT TO SECTION FIVE THOUSAND TWO HUNDRED THIRTY  OF  THIS
 ARTICLE SHALL RETAIN THE PRIORITY OF THE ONGOING EXECUTION. If an income
 execution  delivered to a sheriff is returned unsatisfied in whole or in
 part because the sheriff to whom it was  delivered  is  unable  to  find
 within  the county the person or entity from whom the judgment debtor is
 receiving or will receive money, the execution may be delivered  to  the
 sheriff  of  any  county in which such person or entity has an office or
 place of business. The priority of an income execution  delivered  to  a
 sheriff  within  twenty  days  after its return by each previous sheriff
 shall be determined by the time of delivery to the first sheriff.
   (k) Accounting by sheriff. It shall be the duty of the sheriff to whom
 such income execution shall be delivered, from time to time and at least
 once every ninety days from the time a levy shall be made thereunder, to
 account for and pay over to  the  person  entitled  thereto  all  monies
 collected  thereon, less his lawful fees and expenses for collecting the
 same. PROVIDED, HOWEVER, THAT IF A JUDGMENT CREDITOR ISSUES  AN  AMENDED
 EXECUTION  PURSUANT  TO SECTION FIVE THOUSAND TWO HUNDRED THIRTY OF THIS
 ARTICLE BECAUSE THE APPLICABLE INTEREST RATE CHANGES PURSUANT TO SECTION
 FIVE THOUSAND FOUR OF THIS CHAPTER, ANY MONEY COLLECTED IN EXCESS OF THE
 JUDGMENT AMOUNT SHALL BE PROMPTLY RETURNED TO THE DEBTOR.
   § 6. Subdivisions (a) and (c) of section 5222 of  the  civil  practice
 law  and rules, subdivision (a) as amended by chapter 409 of the laws of

 S. 5724--A                          6
 
 2000 and subdivision (c) as amended by chapter 575 of the laws of  2008,
 are amended to read as follows:
   (a)  Issuance; on whom served; form; service. A restraining notice may
 be issued by the clerk of the court or the  attorney  for  the  judgment
 creditor  as  officer  of  the  court, or by the support collection unit
 designated by the appropriate social services district. It may be served
 upon any person, except the employer of a  judgment  debtor  or  obligor
 where  the  property sought to be restrained consists of wages or salary
 due or to become due to the judgment debtor  or  obligor.  It  shall  be
 served  personally  in  the same manner as a summons or by registered or
 certified mail, return receipt requested or if  issued  by  the  support
 collection unit, by regular mail, or by electronic means as set forth in
 subdivision  (g) of this section. It shall specify all of the parties to
 the action, the date that the judgment or order was entered,  the  court
 in  which  it  was  entered, the amount of the judgment or order and the
 amount then due thereon, the names of all parties  in  whose  favor  and
 against  whom  the  judgment  or  order  was entered, it shall set forth
 subdivision (b) and shall state that disobedience  is  punishable  as  a
 contempt of court, and it shall contain an original signature or copy of
 the original signature of the clerk of the court or attorney or the name
 of the support collection unit which issued it. IF THE APPLICABLE INTER-
 EST  RATE CHANGES PURSUANT TO SECTION FIVE THOUSAND FOUR OF THIS CHAPTER
 WHILE A RESTRAINT IS IN EFFECT, THE JUDGMENT  CREDITOR  SHALL  ISSUE  AN
 AMENDED  RESTRAINING  NOTICE,  AND  INCLUDE THE DATE AS OF WHICH THE NEW
 INTEREST RATE APPLIES, WITHOUT LEAVE OF COURT AS REQUIRED UNDER SUBDIVI-
 SION (C) OF THIS SECTION. Service of a restraining notice upon a depart-
 ment or agency of the state or upon an institution under  its  direction
 shall  be made by serving a copy upon the head of the department, or the
 person designated by him or her and upon the state department  of  audit
 and  control at its office in Albany; a restraining notice served upon a
 state board, commission, body or agency which is not within any  depart-
 ment  of  the state shall be made by serving the restraining notice upon
 the state department of audit and  control  at  its  office  in  Albany.
 Service at the office of a department of the state in Albany may be made
 by  the  sheriff  of  any county by registered or certified mail, return
 receipt requested, or if issued by the support collection unit, by regu-
 lar mail.
   (c) Subsequent notice. Leave of court is required to serve  more  than
 one  restraining  notice  upon  the same person with respect to the same
 judgment or order. A judgment creditor shall not  serve  more  than  two
 restraining notices per year upon a natural person's banking institution
 account.  IF  THE  APPLICABLE  INTEREST RATE CHANGES PURSUANT TO SECTION
 FIVE THOUSAND FOUR OF THIS CHAPTER WHILE A RESTRAINT IS IN  EFFECT,  THE
 JUDGMENT  CREDITOR  SHALL  ISSUE  AN  AMENDED RESTRAINING NOTICE WITHOUT
 LEAVE OF COURT.
   § 7. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.