Turnover Proceedings Under CPLR §§ 5225 and 5227
Compelling Banks, Third Parties, and Transferees to Surrender Assets Owed to Judgment Creditors
When a judgment debtor refuses to pay voluntarily, a turnover proceeding is often the most effective path to recovery. These proceedings allow courts to order banks, employers, transferees, and other third parties to turn over money or property belonging to the debtor. In many cases, turnover proceedings reach assets that restraining notices alone cannot access.
New York’s turnover statutes — CPLR §§ 5225(a), 5225(b), and 5227 — are powerful tools. They are also technical, and success requires careful analysis of who holds the assets, what legal interest the debtor has in them, and which procedural route is appropriate.
I take on a limited number of these matters so that each can be pursued with the precision they require.
What a Turnover Proceeding Accomplishes
A turnover proceeding seeks a court order directing a person or entity to deliver money or property to the judgment creditor. Unlike a restraint, which temporarily freezes assets, a turnover order transfers them — often permanently. Turnover proceedings are used when:
- a bank holds funds belonging to the debtor,
- an employer owes wages or commissions,
- a third party is holding property for the debtor,
- another company owes money to the debtor’s business,
- assets were transferred to family members or related entities,
- a debtor is using a corporate form to shield personal assets.
Understanding the Three Key Turnover Statutes
CPLR § 5225(a)
Used when the debtor possesses the property. This provision allows the court to order the debtor to surrender assets directly.CPLR § 5225(b)
Used when a third party holds property in which the debtor has an interest. This is one of the most frequently used turnover statutes in judgment enforcement. It is particularly effective when banks, employers, business partners, or transferees have control over assets.CPLR § 5227
Used when a third party owes a debt to the judgment debtor. This includes money that will become due in the future, such as receivables, commissions, revenue streams, or obligations arising from contracts.These statutes are powerful because they allow the court to command the cooperation of third parties who may prefer not to become involved in the debtor’s affairs.
Why Turnover Proceedings Matter
Restraining notices alone often stop short of actual recovery. A bank may freeze an account, but without a turnover order, the funds remain inaccessible. Third parties may ignore information subpoenas or claim confusion about their obligations. Debtors may transfer assets to relatives or operate through multiple companies.
Turnover proceedings provide:
- judicial authority,
- enforceable orders,
- clarity for third parties,
- remedies when assets have been transferred improperly,
- the ability to reach assets that are not in the debtor’s possession,
- an avenue to unwind fraudulent transfers.
Common Scenarios Where Turnover Proceedings Are Effective
- Bank accounts or brokerage accounts. A restraint freezes the funds; a turnover order transfers them to the creditor.
- Commissions, wages, or payments owed to the debtor. An employer or contracting party can be ordered to pay the creditor instead of the debtor.
- Receivables owed to the debtor’s business. Companies that owe money to the debtor can be compelled to satisfy the judgment directly.
- Transfers to family members or insiders. Turnover proceedings can be paired with fraudulent-transfer claims when assets were moved to evade collection.
- Assets held by related corporate entities. When a debtor uses multiple companies, turnover litigation can reach the entity actually holding the assets.
Procedure and Strategy
A successful turnover proceeding requires more than serving papers. It begins with understanding the asset, its legal status, who controls it, and what evidence supports your claim to it. I examine bank records, business documents, contracts, financial statements, and transfers to build a clear picture of the asset trail. Turnover proceedings typically involve:
- filing a petition or initiating a special proceeding,
- presenting evidence of the debtor’s interest in the asset,
- serving all parties who may have a claim to the property,
- obtaining a court order directing turnover or further discovery,
- enforcing compliance if a party refuses to comply voluntarily.
When Turnover Proceedings Combine With Other Remedies
Turnover proceedings often intersect with:
- fraudulent-transfer actions under the Debtor and Creditor Law,
- restraining notices to freeze assets during litigation,
- information subpoenas to identify missing assets,
- veil-piercing or alter-ego theories,
- claims against transferees who received assets without fair consideration.
Turnover Proceedings Frequently Asked Questions
What is a turnover proceeding under New York law?
A turnover proceeding is a court action that compels a debtor, or a third party holding the debtor’s property, to deliver assets to satisfy a judgment. These proceedings allow creditors to reach assets that ordinary restraints or sheriff executions cannot reach on their own.
What is the difference between CPLR § 5225(a) and CPLR § 5225(b)?
CPLR § 5225(a) applies when the debtor is in possession of the property. CPLR § 5225(b) applies when a third party holds the debtor’s property or owes a debt to the debtor. Section 5225(b) is especially powerful because it allows judgment creditors to reach bank accounts, receivables, or funds held by someone else.
What is a CPLR § 5227 proceeding?
CPLR § 5227 allows a creditor to compel payment from someone who owes a debt to the judgment debtor, such as a client, customer, or contracting party. It is commonly used when the debtor is receiving income through a business or other revenue stream.
Why would I need a turnover proceeding if I already served restraining notices?
Restraining notices freeze assets, but they do not transfer them. A turnover order is the mechanism that requires banks or third parties to deliver restrained funds. Without a turnover order, money may remain frozen indefinitely or stay out of reach when held by a third party.
How quickly can a turnover proceeding be filed?
A turnover proceeding can often be prepared and filed quickly once the target assets or relevant third party are identified. Because many proceedings are brought by order to show cause, timelines can be accelerated when expedited relief is appropriate.
Do I have to prove that the debtor still owns the property?
No. Under CPLR § 5225(b) and CPLR § 5227, the creditor must show only that a third party possesses property in which the debtor has an interest, or owes a debt to the debtor. The burden then shifts to the debtor or third party to assert defenses or competing claims.
Can turnover proceedings reach assets moved to someone else?
Yes. Turnover proceedings can reach assets transferred to related individuals, business partners, or affiliated companies if the debtor retains an interest. If the property was transferred outright to evade creditors, fraudulent transfer claims may be pursued alongside the turnover request.
How long do turnover proceedings take?
Some turnover proceedings resolve in a matter of weeks if uncontested. Others require discovery or hearings, particularly when ownership is disputed. Even contested proceedings often apply substantial pressure that leads to payment or settlement.