Judgment Enforcement Receiver in New York: CPLR 5228

A judgment enforcement receiver in New York is an independent person a court appoints under CPLR 5228 to take control of a judgment debtor’s real or personal property and use it to pay the judgment. The receiver can collect rents, run a business, sell assets, and chase property that a sheriff’s levy would never reach. Courts don’t hand this remedy out casually: it’s reserved for cases where ordinary tools like bank restraints, income executions, and information subpoenas have failed or clearly won’t work.¹

When a Receiver Is the Right Tool

CPLR 5228 lets any judgment creditor move for appointment of a receiver over the debtor’s property, with authority to collect income, make repairs, lease, sell, or take “any other acts designed to satisfy the judgment.”¹ That breadth is the point. A sheriff can seize a car and auction it. A receiver can step into a going business, manage rental buildings, or administer membership interests in LLCs that no one would bid on at a courthouse sale.

Receivership is an equitable remedy, which means the court decides whether to grant it based on the circumstances. The strongest motions share a few features:

The creditor has already tried conventional enforcement, or can explain why it would be futile.
The debtor has obstructed collection by ignoring subpoenas, moving assets, or operating through multiple entities.
The assets at issue need active management or are intangible and illiquid. The New York Court of Appeals in Hotel 71 Mezz Lender LLC v. Falor upheld a receivership over LLC membership interests precisely because the property “lacks a ready market, and presents nothing that a sheriff can work with at an auction.”²
The judgment is large enough that the receiver’s fees and expenses won’t swallow the recovery.

If the judgment is modest and the debtor has a steady paycheck or an identifiable bank account, a receiver is overkill. If the debtor runs a cash business, holds interests in closely held companies, or has been playing games with asset transfers, this is where the remedy earns its place.

What the Receiver Can and Cannot Do

The appointment order defines the receiver’s powers. CPLR 5228 requires the order to specify the property to be managed, the receiver’s duties, and how those duties are carried out.¹ A receiver who steps outside that order is acting without authority. Typical powers include collecting rents, taking over bank accounts, selling real property, and operating a business to keep revenue from vanishing.

Two limits matter. First, the receiver can’t hire an attorney without specific court authorization.¹ If the receiver needs counsel to pursue a fraudulent transfer claim or close a complex sale, they must go back and ask. Second, the receiver is a fiduciary to the court and all parties, not an agent of the creditor who filed the motion. That means preserving value where possible instead of liquidating at fire-sale prices.

The receiver must also post a bond under CPLR 6402 and 6403 before taking control, with the amount set by the court based on the value of the property involved.¹ CPLR 6404 requires written records of everything collected, spent, and held, open to inspection by anyone with an apparent interest in the property.³ Creditors and debtors use that accounting to monitor what’s happening.

What It Costs

The receiver’s commission is capped at 5% of the total sums collected and disbursed.¹ When that calculation produces less than $100, the court may allow up to $100 as a minimum.⁴ One wrinkle worth knowing: if the judgment creditor is appointed as the receiver, they get no compensation at all.

The commission isn’t the whole bill. Expect to pay the bond premium, attorney fees for drafting and arguing the motion, and the receiver’s necessary expenses, which the statute allows separately. If the court lets the receiver retain counsel for asset-recovery litigation, those fees compound. On a small judgment, these costs can eat most of the recovery. On a large one, the 5% cap keeps the receiver’s share proportional.

Filing the Motion and Giving Notice

The creditor starts by filing a motion in the court where the judgment was entered. CPLR 5228 requires notice “as the court may require,” and directs that, so far as practicable, the judgment debtor and any other judgment creditors of the debtor be given notice.¹ The court can require broader notice depending on the situation.

After appointment, the receiver works under continuing judicial supervision. Major steps like real estate sales, business contracts, and distributions to creditors generally require a formal application with supporting documentation. The court can modify the receiver’s authority at any time if circumstances change.

When multiple creditors hold judgments against the same debtor, any of them can ask the court to extend the receivership to their judgment too. CPLR 5228(b) says the court “shall extend the receivership” on motion of a judgment creditor with appropriate notice.¹ Priority among competing creditors follows the usual rules for statutory liens, secured interests, and timing of enforcement.

What the Debtor Gets to Keep

A receivership doesn’t strip the debtor of everything. New York’s exemption statutes apply regardless of whether collection comes through a sheriff or a receiver, so part of the planning is estimating what’s actually recoverable.

Under CPLR 5205, the debtor keeps household furniture, one refrigerator, one television, one computer with equipment, one cellphone, clothing, cooking utensils, and prescribed health aids. Tools of the trade are exempt up to $3,000 if necessary to the debtor’s profession. Earnings get strong protection: 90% of wages for personal services rendered within 60 days before an income execution are exempt, and IRA or Keogh retirement income is 100% exempt.⁵

The homestead exemption under CPLR 5206 protects equity in the debtor’s principal residence. The cap depends on where the home sits:

$150,000 in the five boroughs of New York City and in Nassau, Suffolk, Rockland, Westchester, and Putnam counties.
$125,000 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties.
$75,000 in every other county in the state.

These are equity amounts above liens and mortgages, so a heavily mortgaged home may leave little exposed.⁶ The exemption covers houses, co-op shares, condominiums, and mobile homes.

The debtor can also fight the appointment itself. A motion to vacate or modify can argue that less intrusive enforcement would work, or that the debtor has a realistic plan to pay. Debtors can petition the court if the receiver exceeds the order or mismanages the property.

If the Debtor Files for Bankruptcy

A bankruptcy filing stops a receivership cold. The automatic stay under 11 U.S.C. § 362 halts enforcement of pre-petition judgments and any action to control estate property.⁷ A state-court receiver qualifies as a “custodian” under the Bankruptcy Code. Once the receiver learns of the filing, they must stop disbursements, preserve the property, deliver it to the bankruptcy trustee, and file an accounting.⁸

The bankruptcy court can let the receiver continue if that would better serve creditors overall, but that’s rare. The receiver is entitled to reasonable compensation for work already done but can be surcharged for improper disbursements before turnover.⁸ For a creditor, a strategic bankruptcy filing can end months of receivership work overnight.

Turnover Orders: The Cheaper Alternative

Not every collection problem needs a receiver. CPLR 5227 lets a judgment creditor bring a special proceeding against any person who owes money to the debtor, now or in the future. The court can order that third party to pay the creditor directly.⁹ When the debtor has identifiable income streams from a known source, like a tenant or a business partner, a turnover order is faster and cheaper than a receivership. Many creditors try turnover first and move to receivership only when the debtor finds ways around it.

Enforcing Compliance and Clawing Back Transfers

A receivership order carries teeth. If the debtor refuses to turn over records, blocks access to property, or interferes with the receiver, the court can hold them in civil contempt under Judiciary Law § 753, with possible fines, imprisonment, or both.¹⁰ The statute sets no fixed cap; courts set penalties to coerce compliance or compensate for the loss. Third parties, including banks and tenants, can face contempt sanctions if they ignore the receiver’s lawful demands.

When assets have already been moved, Debtor and Creditor Law § 273 lets a creditor void transfers made with actual intent to defraud creditors, or transfers made without reasonably equivalent value while the debtor was effectively insolvent.¹¹ Courts look at red flags like transfers to insiders, debtors who kept control after transferring, concealed transfers, and transfers made during active litigation. Under DCL § 276, remedies include voiding the transfer, attaching the property, enjoining further disposition, and even appointing a receiver over the transferee’s property.¹² The person who received the assets can be dragged into the litigation and forced to give them back.

Wrapping Up the Receivership

A receivership ends with a formal discharge. The receiver files a final accounting covering everything collected, every expense, every distribution, and any remaining assets. Creditors and debtors can review it and object. Disputes over charges or disbursements get raised at this stage.

Once the court is satisfied, it issues an order of discharge. Remaining funds are distributed according to legal priority, and the receiver is released from further duties unless someone can prove misconduct or breach of fiduciary duty. At that point the judgment is either satisfied or the creditor has to look for other ways to collect what’s left.

1
New York State Senate. New York Civil Practice Law and Rules 5228 – Receivers
2
Justia. Hotel 71 Mezz Lender LLC v Falor
3
New York State Unified Court System. New York Civil Practice Law and Rules – Receivership
4
New York State Senate. New York Civil Practice Law and Rules 8004 – Commissions of Receivers
5
New York State Senate. New York Civil Practice Law and Rules 5205 – Personal Property Exempt from Application to the Satisfaction of Money Judgments
6
New York State Senate. New York Civil Practice Law and Rules 5206 – Real Property Exempt from Application to the Satisfaction of Money Judgments
7
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
8
Office of the Law Revision Counsel. 11 USC 543 – Turnover of Property by a Custodian
9
New York State Senate. New York Civil Practice Law and Rules 5227 – Payment of Debts Owed to Judgment Debtor
10
New York State Senate. New York Judiciary Law 753 – Power of Courts to Punish for Civil Contempts
11
New York State Senate. New York Debtor and Creditor Law 273 – Transfer or Obligation Voidable as to Present or Future Creditor
12
New York State Senate. New York Debtor and Creditor Law 276 – Remedies of Creditor