New York CPLR 5222: 7 Stages of a Restraining Notice and Where You Can Intervene

One Page of Paper, Seven Moving Parts

The document that empties a New York business of its working capital is two pages long, costs the creditor almost nothing, and is signed by the other side’s lawyer. Owners tend to experience it as a single catastrophic event, which is why so many of them call a bank branch, get told nothing can be done, and stop looking. What is actually happening is a sequence with seven separate stages, governed by different sections of Article 52, running on different clocks, and each has a specific place where a business with counsel can change the outcome.

Below is that sequence in order, from the moment a judgment gets filed through the day a marshal takes money out of the account, with the statute that controls each stage and the intervention that fits. One warning belongs up front: nearly every dollar figure people quote about New York account exemptions comes from provisions written for a natural person’s account. A limited liability company’s operating account is not protected by them, and reading those numbers as a floor under your payroll is the most expensive mistake made at this stage.

1. Entry of Judgment Arms the Notice

Nothing in Article 52 is available without a judgment or order to enforce, and entry is mechanical rather than adjudicated: under C.P.L.R. §5016(a), a judgment is entered when, after it has been signed by the clerk, it is filed by the clerk. The docket then carries a date, an index number and a county, and those three facts drive everything that follows, including which sheriff or city marshal can act and which court hears your motion. Interest starts running under §5004(a) at nine percent a year, because the two percent rate in that section reaches only an action arising out of a consumer debt where a natural person is the defendant.

The creditor’s incentive here is speed, and the fastest path to entry is one you did not participate in. A judgment can be entered on a default, on a confession filed with a county clerk, or on a stipulation, and in each of those the substance of your dispute was never examined. That is the design of the system, and it is why the intervention at this stage is the most powerful one available: if the judgment falls, every restraint, levy and execution built on it falls with it, and §5015(d) lets the court direct restitution of what was already collected.

Two doors, on two very different clocks. Under §5015(a)(1) you move to vacate an excusable default within one year after service of a copy of the judgment with written notice of its entry, and you have to offer both a reasonable excuse and a defense with substance to it. Under §5015(a)(4) you move on the ground that the court lacked jurisdiction to render the judgment, and that ground carries no time limit at all, which is the doorway that matters when service went to an address you left in 2022. Note that the one-year clock runs from service of the notice of entry rather than from the day you found out.

2. Issuance Without a Courtroom

This is the fact that surprises every business owner who hears it, and it sits on the face of the statute. Section 5222(a) provides that a restraining notice may be issued by the clerk of the court or the attorney for the judgment creditor as officer of the court. No application, no appearance, no judge, no filing that anyone reviews for accuracy. The lawyer who sued you prints it, signs it, and serves it. Knowing that saves days of wasted effort, because owners go looking for the court order behind a freeze and there usually is not one.

The statute does impose one limit on repetition that is worth knowing early: under §5222(c), leave of court is required to serve more than one restraining notice upon the same person with respect to the same judgment. So the first notice to your bank is free and unreviewed, and a second one against that same bank on that same judgment needs a judge’s permission. That asymmetry becomes useful at stage six, when the first notice expires.

Because nobody screens issuance, the intervention here aims one level down, at whether the judgment behind the signature was properly entered. Where the judgment came out of a confession, C.P.L.R. §3218 gives you three independent tests: subsection (a)(1) requires the affidavit to state the county where the defendant resides, subsection (b) permits filing only with the clerk of the county the affidavit named as the residence when executed or the county of residence at filing, and subsection (b) also permits filing only within three years after the affidavit is executed. No judgment by confession may be entered after the defendant’s death.

Run those tests against the affidavit itself rather than the funder’s description of it. An out-of-state merchant confessed into a New York county where it never resided has a jurisdictional problem, and jurisdictional problems go through §5015(a)(4) with no clock on them.

3. Service on the Bank and the Minute It Locks

The freeze happens on service, and the garnishee is the bank rather than you. Section 5222(b) forbids a person served with a restraining notice from making or suffering any sale, assignment or transfer of, or any interference with, property in which the judgment debtor has an interest, and from paying over any debt owed to the judgment debtor to anyone other than the sheriff. Against a garnishee the notice bites only if, at the time service is completed, that garnishee owes a debt to you or holds property it knows or has reason to believe you have an interest in. A deposit account is a debt the bank owes you, which is why accounts are the first target.

Then there is the notice problem, which is statutory and deliberate. Section 5222(d) requires a copy to be mailed within four days of service to each judgment debtor who is a natural person. If the judgment debtor is your corporation or your LLC, that obligation does not run to it. So the sequence a business experiences is that the bank is served on a Wednesday and you learn about it when a vendor ACH bounces or a payroll file is rejected on Friday morning. The signals that precede all of this are collected in the thirty-day warning signs.

The intervention that fits this stage is the one most owners have never heard of, and it does not require unwinding the judgment. Section 5240 provides that the court may at any time, on its own initiative or the motion of any interested person, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure. That is an unusually broad grant, and it is the vehicle for asking a judge to release a specific account so payroll clears, to cap what the bank holds, or to condition the restraint on a payment schedule.

Two practical notes. Get the date service on the bank was completed, because it starts the one-year clock at stage six and fixes what the bank held when the restraint attached. And do not move money in response: §5222(b) restrains the judgment debtor as well as the garnishee, willful disobedience is punishable as contempt under §5251, and a transfer made to hinder or delay a creditor is voidable under Debtor and Creditor Law §273.

4. The Twice-the-Judgment Cap Across Two Accounts

Section 5222(b) contains the sentence that explains why a freeze takes out so much more than the debt. If a garnishee served with a restraining notice withholds the payment of money belonging or owed to the judgment debtor in an amount equal to twice the amount due on the judgment or order, the restraining notice is not effective as to other property or money. It is a ceiling on the garnishee’s obligation, and the number is double. On a judgment of $240,000 the bank’s job is done once it has held $480,000, and until it reaches that figure the notice keeps reaching whatever else it holds.

The two-account situation is where this gets expensive. Suppose the operating account carries $190,000 and a reserve account at the same institution carries $120,000. Total held is $310,000, under the $480,000 ceiling, so nothing in the statute requires the bank to leave either account alone. Both freeze. Now put those accounts at two different banks. Each institution is a separate garnishee applying the cap to itself, nothing in §5222 coordinates them, and a business can find twice the judgment restrained at one bank and twice the judgment restrained at another. Neither result is a bank error.

From the creditor’s side the cap is not really a limit, it is insurance against a turnover dispute, and its counsel has no obligation to tell your bank what other institutions are holding. So the over-restraint is almost never corrected until somebody produces the actual balances and demands it. That is the intervention: a written demand to the garnishee’s legal department, with the balances and the judgment amount, asking that holdings above twice the judgment be released as the statute says the notice is not effective as to them.

When the demand does not work, there are two motions. Section 5240 gives the court authority to limit or modify the enforcement procedure, and §5239 lets any interested person commence a special proceeding, before a sheriff or receiver applies the property, to determine rights in it, with the court empowered to vacate the execution and void the levy. Bring that one with bank statements attached.

5. The Exemption Layer Written for People, Not Companies

New York’s exemption machinery is genuinely protective, and it was built for individuals. Section 5222(h) directs that where statutorily exempt payments were deposited electronically or by direct deposit into the account within the forty-five day period preceding service, the banking institution shall not restrain two thousand five hundred dollars. The Department of Financial Services publishes an inflation-adjusted figure for that provision and its companions, currently $3,425, effective April 1, 2024 with the next adjustment due April 1, 2027. Section 5222(i) separately provides that a restraining notice does not apply to an amount equal to or less than the greater of two hundred forty times the federal minimum hourly wage or two hundred forty times the state minimum hourly wage.

Run the §5222(i) arithmetic, because the number is bigger than people expect and it is regional. New York’s minimum wage rose on January 1, 2026 to $17.00 an hour in New York City, Long Island and Westchester and $16.00 in the remainder of the state, so two hundred forty times the state figure is $4,080 downstate and $3,840 upstate, against $1,740 at the federal rate of $7.25. Section 5222-a supplies the procedure: the bank sends an exemption notice and claim forms, and the debtor has twenty days to assert a claim.

Here is the part that has to be said without softening. Every one of those provisions is keyed to a natural person. Section 5222-a governs a restraining notice affecting a natural person’s account, the four-day mailing in §5222(d) runs to a judgment debtor who is a natural person, the notice content in §5222(e) recites sources of exempt income that get direct-deposited into personal accounts, and §5205(d)(2) protects ninety percent of earnings. If the judgment names your LLC and the account is the company’s operating account, none of it gives you a protected minimum balance. Not $2,500, not $3,425, not $4,080.

So the intervention splits depending on whose name is on the judgment. If a personal guaranty put you on it individually, your own account has the floors above and the twenty-day claim window under §5222-a is a deadline you cannot miss, because an unasserted exemption is one the bank will not apply for you. If only the entity is on the judgment, the protection for payroll is not statutory, it is negotiated or ordered.

6. One Year Against the Garnishee, and the Renewal Problem

A restraint is not permanent and the duration sits in §5222(b): served upon a person other than the judgment debtor, the notice is effective for one year after service is completed, or until the judgment is satisfied or vacated, whichever occurs first. Against you, the judgment debtor, the prohibition runs while the judgment stands. So a bank served in March of one year is off the hook the following March unless something else happens, and what happens next is a decision the creditor has to make and pay for.

The creditor’s options at month twelve are narrower than they look. Serving a second restraining notice on the same bank for the same judgment requires leave of court under §5222(c), which means a motion, a judge and a record. Skipping the restraint and going to collection means an execution and a levy under §§5230 and 5232, which brings in a sheriff or a marshal and a fee structure. Either route costs money on a file the creditor has already been carrying.

That is why the twelve-month mark is the most reliable settlement window in New York enforcement, and why the intervention here is a negotiated release rather than a motion. What a release has to contain is specific, and a bad one is worse than none: identification of the named accounts by institution and last four digits, a direction to the garnishee to lift the restraint, a stipulation of settlement with a payment schedule and a defined default cure, a satisfaction of judgment filed on completion, termination of any UCC financing statement, an express release of guarantors, and a covenant not to re-serve while payments are current.

Two cautions on the arithmetic. Interest under §5004(a) runs at nine percent throughout, so the balance you settle in month twelve is not the balance from the complaint, and a schedule stretched too far leaves you paying more than the original judgment. And a satisfaction is not automatic, so make the filing a dated obligation in the stipulation rather than a courtesy you hope for. Where a funder has also been writing to your customers, our page on restraint letters sent to your customers covers that side of the same judgment.

7. Levy, Execution, and the Officer Who Actually Takes It

Freezing money and taking money are different acts under different sections, and the gap between them holds the last set of options. A restraint holds the account in place. To move the funds the creditor issues an execution, and §5230(b) allows that document to be issued by the clerk or, once again, by the attorney for the judgment creditor as officer of the court. Section 5230(c) requires the execution to be returned to the clerk within sixty days after issuance unless it has been served, and the creditor’s attorney may extend that in writing for not more than sixty additional days.

The levy itself is an officer’s act. Under §5232(a) the sheriff levies upon a debt owed to the judgment debtor, which is what a deposit account is, by serving a copy of the execution upon the garnishee in the same manner as a summons. At the expiration of ninety days after that levy, or such further time as the court allows on the creditor’s motion, the levy is void except as to property or debts already transferred or paid over to the sheriff. Enforcement inside the five boroughs can run through a city marshal rather than the sheriff, because a marshal is authorized to enforce a Supreme Court money judgment by N.Y.C. Civil Court Act §1609, and the poundage that officer earns is fixed at five percent of what gets collected in the city by C.P.L.R. §8012(b).

One 1981 case reframes this stage and explains why bank negotiations behave the way they do. In Aspen Industries, Inc. v. Marine Midland Bank, 52 N.Y.2d 575 (1981), the Court of Appeals held that a restraining notice creates no lien on the restrained property and that the bank’s own right of setoff is superior to the restraint. Debtor and Creditor Law §151 supplies that setoff right. So if you carry a line of credit or a business card balance at the same institution holding the frozen deposits, the bank can satisfy itself ahead of the judgment creditor.

Interventions at this stage are procedural and fast. Section 5239 lets any interested person commence a special proceeding before the sheriff or receiver applies the property, and §5240 remains available throughout. The creditor’s own discovery tool also cuts both ways: an information subpoena under §5224 must be answered, with the original questions returned, within seven days after receipt, and the rule requires the creditor or its attorney to certify a reasonable belief that the recipient has information about the debtor, absent which the subpoena is deemed null and void.

The Seven Stages on One Calendar

Put the clocks side by side, because the strategy at any given moment is dictated by which one is running. The table below is the sequence in the same order as the sections above, with the governing provision, the timing the statute imposes, and the move that belongs at that point. Dates control everything in Article 52 practice, so the first thing counsel will ask for is the date the judgment was entered, the date notice of entry was served, and the date service on the bank was completed.

If Your Name Is Also on the Judgment

A personal guaranty changes which parts of this page apply to you, and it usually changes them in your favor at the account level while making the overall exposure worse. Once the judgment names you individually, your own deposit account is a natural person’s account, which switches on the §5222-a procedure: the bank must send you the exemption notice and claim forms, and you have twenty days to assert a claim. The floors then apply, meaning the $2,500 in §5222(h), the Department of Financial Services adjusted figure of $3,425, and the amount computed under §5222(i).

Earnings get their own treatment. C.P.L.R. §5205(d)(2) protects ninety percent of the earnings of a judgment debtor received within sixty days before and at any time after an income execution is delivered, which is why a guarantor drawing a salary is exposed to an income execution rather than to a lump seizure. The practical upshot is that a guarantor’s exposure is chronic where an entity’s is acute, and settlements have to be structured for both. A deal that releases the company and leaves the guaranty alive has solved the smaller half of the problem.

One more asymmetry to plan around. The exemption provisions require somebody to invoke them within a defined window, and nothing happens automatically if you sit on the claim form. Meanwhile the company account has no window and no floor, so counsel is usually running two tracks at once: a claim under §5222-a on the personal side and a negotiated or court-ordered release on the entity side. Where the account is already restrained, the practical steps are in our walkthrough on getting a business account released.

Who Should You Call? Our Top-Rated Business Debt Firms

One firm on this list works the entire lifecycle of a business debt file, from stopping the daily debits through attorney-led negotiation, UCC lien removal, and a signed release. The other two cover broader debt categories that often sit alongside the advances. Choose accordingly.