What is a turnover proceeding in New York, and how do you respond to one?

This page explains New York law. A restraining notice freezes property; a turnover order moves it. Turnover is how a creditor gets a court to direct that a bank balance, co-op shares, a business interest or money owed to the debtor be paid or delivered toward the judgment. It usually comes after the freeze, so if your account is already restrained, read what you can do when a restraining notice freezes your New York bank account as well. Defending turnover petitions, including petitions for co-op shares, bank accounts and personal property, is one of the matters listed on KOR Law LLP's post-judgment and enforcement defense page.

What kinds of turnover are there?

Notice of a turnover motion against the debtor must be served the same way as a summons, or by registered or certified mail, return receipt requested (CPLR 5225(a)). In a proceeding against a third party, the debtor must also be served the same way, and the court may let the debtor and any adverse claimant intervene (CPLR 5225(b), 5227). A third party who did not dispute the debtor's interest is not charged with costs.

Money goes to the creditor. Other personal property goes to "a designated sheriff," not to the creditor, and the court may order any person to sign and deliver whatever document is needed to complete the payment or delivery (CPLR 5225(a), (c)). What a sheriff then does with property is explained in what a sheriff can seize under a property execution and how property is sold.

Creditors often learn where property is from an information subpoena served on the debtor or a bank before they file for turnover. If one of those has arrived too, see whether you have to answer an information subpoena in New York.

Where is a turnover case heard?

CPLR 5221 sets the court. For a judgment entered in a New York court other than the local courts listed in the statute, a turnover proceeding is brought in the Supreme Court or a county court in a county where the respondent lives, is regularly employed or regularly does business in person; if there is no such county, it can be brought in any county where the respondent can be served or the county where the judgment was entered (CPLR 5221(a)(4)). A judgment from the Civil Court of the City of New York is enforced in that Civil Court when the respondent lives, works or does business in the city (CPLR 5221(a)(3)). A turnover motion against the debtor may be made in any court where a proceeding against the debtor could be brought (CPLR 5221(b)).

So when the respondent lives or regularly does business in Brooklyn, a Supreme Court turnover proceeding can be brought in Kings County. Our page on foreclosure and judgment defense for Brooklyn (Kings County) cases covers that courthouse and the County Clerk.

How fast does it move?

Turnover against a third party is a special proceeding, and special proceedings run on short timelines. Under CPLR 403(b), the notice of petition and petition must be served at least eight days before the hearing, and the answer and any supporting affidavits are due at least two days before it. If the petitioner serves at least twelve days before the hearing and demands it, the answer is due seven days before. The notice of petition is served like a summons (CPLR 403(c)), and the court may instead sign an order to show cause with its own schedule (CPLR 403(d)). If the papers raise triable issues of fact, CPLR 410 says they "shall be tried forthwith" and the court must make a final determination.

That last rule matters to a debtor. Where ownership, value or an exemption is genuinely disputed, the court cannot simply grant the petition on paper; the facts must be tried. If an issue is one a jury can decide, CPLR 410 gives the parties a chance to demand a jury, and failing to demand one in the time the court sets, or before trial begins, waives it.

What defenses can a debtor raise?

• The property is exempt. CPLR 5205 and 5206 protect a long list of property, including qualified retirement accounts, 90% of recent earnings and a homestead. See what property a New York judgment creditor cannot take.
• It is not the debtor's property. Turnover reaches property in which the debtor has an interest. Property that belongs to someone else is outside it.
• The creditor's theory against a transferee fails. Against a transferee, the creditor must show its rights to the property are superior to the transferee's (CPLR 5225(b)). A creditor that wants the transfer itself undone sues under a different statute; see whether a creditor can undo a property transfer as a voidable conveyance.
• Marital property held as tenants by the entirety. When only one spouse owes the judgment, ownership by the entirety raises its own limits; see whether a creditor of one spouse can force the sale of a home owned as tenants by the entirety.
• Service and procedure. The statutes specify how the debtor and third parties must be served and how much notice they get.
• Overreach. The court may deny, limit, condition or regulate any enforcement procedure (CPLR 5240), for example where a demand reaches beyond what the judgment requires or duplicates other enforcement; see how a court can limit a creditor's collection efforts.

If the creditor wants the property managed rather than handed over, for example rental income or a business, it may ask instead for a receiver; see when a New York court can appoint a receiver to collect a judgment.

What if someone else claims the property?

A spouse, a business partner or a lender may have its own claim to what the creditor wants. CPLR 5239 lets any interested person, before property is applied to the judgment, start a special proceeding against the creditor to determine rights in the property. It can be brought in the county where the property was levied on, or in a court or county allowed by CPLR 5221(a). The court can vacate the execution or order, void a levy, direct what happens to the property, or award damages, and where facts are disputed it must order a separate trial. If a claim turns out to be fraudulent, the court can make the claimant pay the other side's reasonable expenses and attorneys' fees.

What changes the answer for your turnover case?

• Who holds the property. Property in the debtor's own hands is reached by motion (CPLR 5225(a)); property held by a bank, relative or business, or money someone owes the debtor, takes a special proceeding with its own service and notice rules (CPLR 5225(b), 5227, 403).
• Where the money came from. A qualified retirement account is treated as an exempt trust (CPLR 5205(c)(2)), but additions made within 90 days before the creditor's claim was interposed, or that are voidable transactions, are not exempt (CPLR 5205(c)(5)).
• Whether it is your home. A homestead, including co-op shares or a condominium unit you own and live in, is exempt up to a value set by county (CPLR 5206(a)). The statute's base figure for Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam counties is $150,000, which the Department of Financial Services lists as $204,825 from April 1, 2024. Above that, the judgment lien attaches only to the surplus, and a sale takes a special proceeding in the county where the home is (CPLR 5206(d), (e)).
• Whether the facts are disputed. Triable issues must be tried, not decided on paper (CPLR 410), and an adverse claimant's dispute gets a separate trial (CPLR 5239).
• Whether the third party fights. A bank or other holder that does not dispute the debtor's interest is not charged with costs (CPLR 5225(b)), so it often leaves the defense to the debtor.
• Which court entered the judgment. A Civil Court of the City of New York judgment is enforced in that court; most others go to the Supreme Court or a county court (CPLR 5221(a)).

For example: a turnover petition against a bank

Common mistakes when served with turnover papers

• Counting weeks instead of days. The answer can be due two days before the hearing, or seven days before when the petition demands it (CPLR 403(b)). Read the notice for the demand.
• Assuming the bank will defend you. A holder that does not dispute your interest pays no costs (CPLR 5225(b)), so it has little reason to argue your exemption for you.
• Claiming an exemption without proof. Retirement, benefit and homestead exemptions turn on where the money came from and how the property is held. Bring the statements and plan documents, not just the label.
• Moving property after a restraining notice. A debtor served with a restraining notice may not transfer or interfere with property in which the debtor has an interest until the judgment is satisfied or vacated (CPLR 5222(b)).
• Ignoring the order once it is signed. Refusing or willfully neglecting to obey an order granted in enforcement is punishable as contempt of court (CPLR 5251).
• Letting a jury right lapse. If a factual dispute is triable by jury, the demand must be made by the court's deadline or before trial begins (CPLR 410).

What to do this week

1. Find the hearing date, the date and method of service, and whether the notice demands an answer seven days ahead; mark the answer deadline.
2. List exactly what property the petition seeks and who holds it.
3. Gather proof of ownership and source: deeds, stock certificates or proprietary leases for co-op shares, account agreements, operating agreements, retirement plan statements, benefit letters and pay records.
4. If a homestead is involved, collect share loan or mortgage statements and any appraisal that shows value above liens.
5. Pull together every earlier restraining notice, subpoena and execution on the same judgment, using our checklist of what to gather when enforcement starts.
6. Do not move or spend restrained property, and arrange to speak with a lawyer before the answer is due.

Frequently asked questions

Can a creditor use turnover to take my co-op apartment?

Co-op shares you own and live in as a principal residence are a homestead under CPLR 5206(a)(2), exempt up to the county limit in value above liens. Above that limit, the creditor's path is a sale proceeding under CPLR 5206(e), and the court marshals the proceeds. We explain the valuation in whether New York's homestead exemption protects a co-op apartment.

What if I missed the hearing and an order was entered?

CPLR 5015(a)(1) lets the court that made an order relieve a party from it for excusable default, if the motion is made within one year after service of the order with written notice of its entry. Other grounds, such as lack of jurisdiction or fraud, have no such one-year limit in the statute. See whether you can undo a default judgment in New York for how these motions work.

Can a creditor use turnover to take my wages?

Wages are normally reached through an income execution, not turnover, and a restraining notice cannot be served on an employer for wages due to the debtor (CPLR 5222(a)). Ninety percent of earnings for personal services within 60 days before, and any time after, an income execution or wage motion is exempt (CPLR 5205(d)(2)). Our page on wage garnishment through an income execution covers the limits.

What happens if I do not comply with a turnover order?

Refusing or willfully neglecting to obey an order granted under the enforcement article is punishable as contempt of court (CPLR 5251). If you cannot comply, for example because the property is gone or belongs to someone else, raise it with the court before the deadline rather than after.

Can the court appoint someone to oversee the process?

Yes. CPLR 5240 makes CPLR 3104 apply to enforcement, and CPLR 3104 lets the court have one of its judges or a referee supervise all or part of the procedure. A referee under CPLR 3104 cannot hold anyone in contempt; that stays with the court.

How long can a creditor keep bringing turnover proceedings?

A money judgment is presumed paid twenty years after the creditor was first entitled to enforce it, unless the debtor acknowledged the debt in a signed writing or made a payment within that time (CPLR 211(b)). Property taken by an enforcement order counts as a payment. See how long a judgment lasts in New York.