A Note from Karen Riggio, Attorney-at-Law
It’s a stressful time for small business owners, and today paying attention to the changes in debt collection laws can be a major occupation – and a necessary one. In this issue you will find one such change that will affect many who are attempting to collect a debt owed.

New! Visit our website’s new Letters and Forms Section. Available alone or combined with ½ hour or 1 hour one-on-one consultation with me, you’ll find the forms and letters you need to create the right contracts for your business, so that collection never becomes an issue.

Each month, we offer valuable tips and practical, real life answers to today's common contract issues and collection problems. Feel free to email me your suggestions for future articles.

Karen M. Riggio

Businesses seeking to collect on judgments from consumers in New York State should be aware that a new, stricter amendment of the recent Exempt Income Protection Act will impact them. The act which passed last year was originally meant to prevent social security, child support, disability benefits and other “exempt income” from being seized from bank accounts to ensure debtors’ life-needs may be met.

The law has now been expanded to exempt $1,716 of any funds within a bank account. Home improvement contractors, home oil providers, or any other home service provider should be aware that collection of their judgments against debtors will be dramatically impacted by this new statute.

Now under the law, the first $1,716 of any debtor’s bank account is exempt from use in satisfying the judgment. Moreover, if the debtor has more than one bank account, $1,716 is exempt on each account.

Sheriffs and marshals are also prohibited from taking the first $1,716 of any property they find to satisfy a judgment. The law has extensive compliance provisions and penalties for violations, including fines that would be imposed on banks that freeze assets. It’s clear that you need to closely monitor your customers’ credit limits to minimize potential lawsuits.

The New York State Banking Department posted a letter to the banking industry on September 10, 2009 regarding the new law. For more information on this law and the latest amendment, visit www.banking.state.ny.us. If you need guidance on how to comply with the law and minimize your risk, contact Karen Riggio, Attorney-at-Law at (203) 968-8715 or feel free to email her.