Restraining Notices, Subpoenas, and Asset Discovery
Identifying, Restraining, and Uncovering Assets through New York’s Judgment Enforcement Tools
Judgment enforcement begins with information. Before assets can be turned over or applied to a judgment, they must be identified, located, and legally restrained. New York’s enforcement law provides powerful tools for freezing assets and compelling disclosure, but these tools require careful use and timing.
I approach asset discovery methodically. The goal is to understand the debtor’s financial footprint, determine where assets may be held, and apply the procedural mechanisms that prevent those assets from disappearing. Because I maintain a focused caseload, these early investigative steps receive close and continuous attention.
Restraining Notices: Freezing Assets Under CPLR § 5222
A restraining notice is one of the most effective tools for preventing a debtor from moving or dissipating assets. Once served on a bank, employer, or third party, it immediately freezes any property belonging to the debtor that is in that party’s possession. Restraining notices are particularly useful for:
- bank accounts and brokerage accounts,
- wages and commissions,
- accounts receivable owed to the debtor’s business,
- property held by agents, contractors, or related entities.
Information Subpoenas: Compelling Answers and Documents
When a creditor needs insight into the debtor’s finances, an information subpoena is often the starting point. It requires a debtor, or a third party with relevant knowledge, to answer written questions under oath and produce documents. Information subpoenas help reveal:
- where the debtor banks,
- current employment or income sources,
- real estate interests,
- business holdings or partnerships,
- receivables or outstanding contracts,
- transfers to family members or related entities.
Subpoenas for Documents and Depositions
For more detailed financial analysis, creditors may issue:
- subpoenas duces tecum, requiring the production of documents, and
- subpoenas ad testificandum, requiring testimony under oath.
Using Discovery to Build an Enforcement Strategy
Asset discovery is not merely a search for bank accounts. It is a broader investigation into how the debtor earns, stores, and transfers value. Through a careful review of financial records, business documents, communications, and public filings, it becomes possible to identify:
- concealed or commingled funds,
- insider transfers,
- undercapitalized companies,
- patterns of evasion,
- successor entities,
- assets held in trust for the debtor’s benefit.
When Debtors Attempt to Evade Discovery
Some judgment debtors refuse to answer subpoenas, provide incomplete information, or attempt to delay the process. New York law provides remedies for noncompliance, including:
- motions to compel,
- contempt proceedings,
- orders assessing costs or sanctions,
- adverse inferences,
- additional discovery directed at third parties.
How Restraining Notices and Discovery Work Together
These tools operate in sequence. Discovery identifies assets; restraining notices prevent their dissipation; turnover proceedings recover them. Each tool strengthens the next, creating steady, controlled pressure on the debtor until compliance is achieved. An effective enforcement strategy coordinates these tools deliberately rather than using them in isolation.
Asset Discovery Frequently Asked Questions
What does a restraining notice actually do?
A restraining notice freezes a debtor’s assets immediately upon service. It does not transfer funds; it prevents the debtor or a third party from moving or spending them. This gives the creditor time to pursue turnover proceedings or additional discovery without the risk of dissipation.
Who can receive a restraining notice?
Banks, employers, business partners, contractors, and any third party holding or owing money to the debtor can receive a restraining notice. It may also be served directly on the debtor to freeze property in the debtor’s possession.
What happens if a bank or third party ignores a restraining notice?
Third parties who violate restraining notices can become liable for the value of the restrained assets. New York treats compliance seriously, and when violations occur, court intervention may be necessary to enforce the creditor’s rights.
What is an information subpoena and when is it used?
An information subpoena is a written demand requiring the debtor or a knowledgeable third party to answer questions under oath and produce documents. It is often the starting point of asset discovery and can reveal bank accounts, employment, receivables, business interests, and prior transfers.
What if the debtor refuses to answer an information subpoena?
If the debtor does not comply, the creditor may seek a court order compelling responses. Courts can impose contempt sanctions, issue further discovery orders, or permit broader subpoenas to third parties when the debtor obstructs the process.
Why would I need subpoenas for documents or depositions?
Document subpoenas and deposition subpoenas provide deeper insight into the debtor’s finances. They can uncover related companies, concealed assets, insider transfers, bank activity, cash flow, and the structure of the debtor’s business. Depositions often reveal information that was not volunteered in writing.
How do restraining notices and subpoenas work together?
Discovery identifies the assets, restraining notices freeze them, and turnover motions recover them. Asset discovery is the foundation, and each step increases pressure on the debtor while ensuring assets remain reachable.
What if the debtor is actively trying to hide assets?
Evasion is common. When debtors obstruct discovery, New York law provides remedies such as motions to compel, contempt proceedings, sanctions, and broader discovery directed at banks, contractors, or affiliated companies. Persistent follow-through is often what ultimately forces cooperation.