Freezing money: restraining notices, levies and garnishment

The New York restraining notice

A restraining notice is the fastest freeze in New York, because a lawyer can issue it without a judge.

A creditor's attorney signs it as an officer of the court, or the court clerk issues it, and it may be served on almost anyone. One person it may not reach is the debtor's employer, as to wages or salary. CPLR 5222¹ draws that line, and a separate page covers why the account has to be found before any of this can begin.

Served on a bank, the notice reaches property the debtor is known or believed to have an interest in, and debts owed to the debtor, both what the bank holds at service and what arrives afterward. CPLR 5222 forbids the bank from paying or transferring any of it to anyone but the sheriff for one year, or until the judgment is satisfied or vacated, whichever comes first. The freeze is wide, but it is capped: if the bank holds back money equal to twice the amount due, the notice does not reach anything else.

Service is like a summons or by registered or certified mail, and the notice must recite the judgment, the amount then due, the text of CPLR 5222(b), and a warning that disobedience is a contempt of court. CPLR 5251² is what makes that warning real. And the right to issue is not unlimited: serving a second notice on the same person for the same judgment takes leave of court, and no more than two a year may hit a natural person's bank account.

The New York bank levy

A levy goes further than a restraining notice. It does not just freeze the money. It moves it.

An execution, like the notice, may be issued by the clerk or by the creditor's attorney as an officer of the court, at any time before the judgment is satisfied or vacated. CPLR 5230³ directs it to the sheriff. A debt owed to the debtor, a bank balance being the common example, is levied on when the sheriff serves a copy of the execution on the bank. CPLR 5232⁴ makes that service the levy.

Once levied, the bank must forthwith transfer the covered property and pay the covered debts to the sheriff, and the levy reaches both what is held at service and what comes in later. So the money goes to the sheriff, not to the creditor directly. That is the step people picture wrong.

On a natural person's account the handover is not immediate. CPLR 5232(g) bars the bank from transferring the funds for at least twenty-seven days, and allows transfer after thirty days only if no exemption claim form or court order has arrived. And the levy itself does not last forever: it becomes void ninety days after service, unless the court extends it, except as to money already paid to the sheriff or tied up in a turnover proceeding.

The Florida writ of garnishment

Florida does not use a restraining notice. A writ of garnishment is the instrument that reaches a bank account there.

A person who has recovered a judgment has a right to a writ reaching debts a third person owes the defendant and the defendant's personal property in a third person's hands. Fla. Stat. 77.01⁵ grants it. After judgment the writ issues on a motion that states the amount of the judgment, and Fla. Stat. 77.03⁶ says plainly that the motion need not be verified or negate exemptions.

Service does the freezing. Fla. Stat. 77.06⁷ makes the garnishee liable for what it owes or holds from service until its answer, and creates a lien on that money. Within 20 days the garnishee answers, stating what it owes or holds and whether it knows of anyone else indebted to the defendant. It retains the account it holds, but Fla. Stat. 77.19⁸ caps what it may keep at double the amount in the writ or double the judgment.

Two clocks follow. Within 5 days after the answer the plaintiff must mail the defendant a copy of it and a notice of the right to move to dissolve the writ. And under Fla. Stat. 77.07(5)⁹ the writ dissolves automatically if the plaintiff does not file a dismissal or a motion for final judgment within 6 months, extendable once by another 6. Judgment against the garnishee, when it comes, is for the lesser of what remains unpaid on the judgment or what the garnishee owed the defendant, under Fla. Stat. 77.083¹⁰. So the garnishee never pays more than it held.

What the bank must leave

A freeze is not a seizure. Some of the money in a frozen account is protected before anyone claims anything, and some protection has to be claimed.

Federal law reaches every bank in both states. Under 31 C.F.R. Part 212¹¹, within two business days of receiving the garnishment order and enough information to tell whether the debtor holds the account, the bank reviews it for Social Security, VA, Railroad Retirement and OPM benefits that arrived by direct deposit in a two month lookback period. A protected amount is set at the lesser of those benefits or the account balance, and the account holder keeps full access to it without asserting anything. Money above that amount follows the bank's ordinary garnishment procedure, and the debtor may still claim further exemptions for it.

New York adds a floor of its own. If exempt payments were directly deposited in the 45 days before service, the bank may not restrain or levy on a set amount. CPLR 5222 and CPLR 5232 write that amount as $2,500, and CPLR 5205¹² says it is adjusted every three years. A published figure gives what is actually in force: the Department of Financial Services lists $3,425, effective April 1, 2024, not applying to cases begun before that date, with the next adjustment scheduled for April 1, 2027. There is a separate wage floor too: CPLR 5222 voids a restraining notice where the account holds ninety percent or less of the greater of 240 times the federal or the state minimum hourly wage, except as to funds a court finds unnecessary for the reasonable needs of the debtor and dependents, and CPLR 5232 states the matching rule for a levy in its own words. These New York protections drop away where the creditor is the state or a municipality, or the debt is for support, if the notice carries the required legend.

When a New York debtor does claim an exemption, the calendar runs fast. Twenty days from the postmark is the window to return the claim forms, the bank releases the funds eight days after the postmark of an executed form unless the creditor objects in that time, and at any hearing the creditor bears the burden of proving what is not exempt. Where the claim shows all funds exempt, the creditor must tell the bank to release them within seven days; for mixed accounts the creditor applies the lowest intermediate balance rule; and a bad-faith dispute exposes the creditor to costs, fees, damages and up to $1,000. A bank that cannot lawfully levy on the account may charge the debtor no fee for the trouble.

Florida's claim process is similar in shape and different in detail. Served with a writ on an individual, the notice tells the defendant that certain wages, money and property stay exempt even in a bank, lists federal benefits among the categories to check, and gives 20 days to file a claim. The plaintiff must then object within 8 business days if the claim was hand delivered or 14 if it was mailed. Exempt head-of-family earnings stay exempt for 6 months after deposit if they can be traced, and up to $4,000 of personal property is exempt for a debtor who claims no homestead, except for a debt owed for child support or spousal support, which that exemption does not reach. Whether any Florida statute sets a fixed dollar floor a bank must leave in every individual's account, the way New York does, is a question the sections here do not reach, and this page will not guess at it.