7 Things a NYC Marshal Can Do to Your Business Bank Account (and 3 They Cannot)

The Officer Who Actually Shows Up in the Five Boroughs

Legally speaking, marshals aren’t city employees. They’re public officers, appointed by the Mayor, and they earn income through commissions and fees. They only act in a given situation once the creditor’s lawyer or the court clerk hands them an execution to carry out.

A marshal can enforce judgments that originate in the civil, supreme and family courts, and can operate anywhere within the five boroughs of NYC.

To begin the levy process, the marshal must serve the execution documents on the bank. Then the bank has to pay the marshal the money right away. That’s for business accounts, though, not individuals; for individuals the bank has to hold the money at least 27 days.

Once the bank is properly served, it is supposed to freeze and lock all relevant accounts for up to 90 days. During this time, the money cannot be moved, spent or transferred. That 90-day period can be extended by a court. Once expired, the levy is void, except for money already turned over.

Before the marshal ever gets involved, it’s possible for the creditor’s lawyer to directly send the bank a restraining notice, which can freeze your account for up to a year. It stops once the bank holds twice the judgment. The lawyer must get a judge’s permission before sending a second restraining notice to the same bank on the same judgment. Also, if the bank didn’t have a legal right to freeze your account, they can’t charge you a fee for it.

The marshal gets five percent of what’s collected, called poundage, even if you settle after the levy. That 5% gets added onto your judgment whenever possible, so the marshal isn’t just getting paid by the judgment holder. The marshal charges fixed fees ($35 for mileage, for example) on top of that. The marshal deducts their own poundage and fees right out of the money collected from your account. Whatever’s left gets sent to the creditor within 30 days. If the fees you were charged seem incorrect, you could ask the city’s Department of Investigation to look into it. One more thing to know: a judgment on a business debt will grow at 9% interest a year; it’s only individual consumer debts where judgments grow at 2% a year instead.

A bank account isn’t the only target either. A marshal can seize business personal property including office equipment, vehicles, stocks and bonds and sell them at public auction. A marshal must follow rules for how to sell property in an auction. The sale is advertised beforehand, a licensed auctioneer runs it or the marshal does it, and any known liens must be announced before bidding starts. If the bidding looks too low the marshal can adjourn the sale.

If the judgment holder agrees, the marshal could set up a payment arrangement with you, avoiding the time and expense of hauling off your property to storage and selling it.

Limit on a Marshal’s Authority

For one thing, a marshal doesn’t search for your accounts. The creditor has to do that themselves and then tell the marshal how to find the accounts that need to be seized.

There’s a second limit: marshals cannot seize or sell real property, so your building or house is off limits to them. Only the sheriff can sell real estate, and that’s a relatively rare option for a creditor.

A third limit on a marshal’s authority is that just because you’re a member of an LLC or a manager of a company, doesn’t mean your personal bank accounts can be levied. If you did sign a personal guarantee, though, then your accounts might be at risk.

A Court Protective Order

So what can you do? Business accounts don’t get the same forms individuals get, which temporarily protect your account’s funds. But a court can limit or change a levy at any time; it’s up to you to ask. You can seek a court protective order.

Also, a marshal usually gives a warning before going into execution mode. That letter from the marshal is called a notice of execution. If you ignore this notice, the marshal can add poundage, mileage charges and other expenses onto your judgment. For all this, it’s better to pay the full judgment (or, if you can’t afford it, work out a deal) and avoid having the marshal come in. If you receive a bill for the marshal’s expenses, ask for a breakdown of the charges.