Michigan Businesses Facing Enforcement of a New York MCA Judgment
A New York merchant cash advance judgment does not reach a Michigan bank account by itself. Two systems are involved, with different questions in each, and a business that argues in the wrong one spends money without improving its position.
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There are two courts in this problem, not one
A Michigan business with a New York merchant cash advance judgment against it is dealing with two legal systems at once, and most of the confusion in these matters comes from treating them as a single system.
The New York court entered the judgment. That court decides whether the judgment is sound. Michigan decides what a judgment can reach here and how somebody has to go about reaching it. Those are different questions, answered by different courts, and they need different lawyers.
Knowing which is which is worth real money, because effort spent in the wrong one does not transfer.
What New York hands the creditor
Inside New York, a judgment creditor has a toolkit. The one encountered first is the restraining notice: CPLR § 5222 permits it to be issued by the clerk or by the judgment creditor's attorney as an officer of the court, and served on any person holding property in which the judgment debtor has an interest.
Beyond holding, there is taking. CPLR § 5225 lets the creditor move, on notice to the debtor, for an order that the debtor pay over money or deliver personal property in which it has an interest, toward satisfying the judgment.
Both of those are New York instruments operating under New York authority.
And what happens at the state line
This is where the page stops being able to help, and says so.
What a New York judgment can do to an account held in Michigan, what has to happen before it can, and what is protected from it are Michigan questions. They involve Michigan procedure and Michigan exemptions, and they need a lawyer admitted in Michigan. This firm is admitted in New York; a page that described Michigan collection law would be describing law its author does not practise, which is not a service to anyone reading it.
So the honest division is:
| Question | Where it belongs | |---|---| | Should this judgment exist? | New York | | Was service proper? | New York | | Can a default be vacated? | New York | | Did a confession affidavit meet the statute? | New York | | What can be reached in Michigan? | Michigan | | What is exempt here? | Michigan | | How must a creditor proceed here? | Michigan |
Why the New York side usually comes first
Because it is upstream. Every collection step is built on the judgment. If the judgment is successfully attacked, the instruments resting on it lose their foundation, and the creditor has to start over — if it can.
CPLR Rule 5015 is the route: the court which rendered a judgment may relieve a party from it, on motion, on specified grounds, with the time limit depending on the ground. Excusable default runs within one year after service of a copy of the judgment with written notice of its entry.
Contrast that with fighting a levy in Michigan while leaving the New York judgment untouched. Even a complete success leaves the creditor holding a valid judgment and free to come back at a different asset, in a different way, next quarter.
That is not an argument for ignoring the local side — if payroll is about to fail, the local side is the emergency. It is an argument about where the durable fix lives.
What to do first, from Michigan
- Get the New York judgment, the county and the index number, and the docket behind them.
- Establish how the judgment arose: defended, defaulted, or confessed. That determines what is available in New York.
- Instruct on both sides if enforcement has already started here. The emergency and the fix are in different states.
- Do not move accounts around. It does not solve the local problem and it creates a new one.
A restrained account covers the first instrument, a confession of judgment covers one route to the judgment, and how an MCA lawsuit is defended covers the case when there is still a case.
Sources
- N.Y. CPLR § 5222, Restraining notice (New York State Senate)
- N.Y. CPLR § 5225, Payment or delivery of property of judgment debtor (New York State Senate)
- N.Y. CPLR Rule 5015, Relief from judgment or order (New York State Senate)
Every case turns on its own agreement, facts and procedural posture. Nothing on this site is legal advice or a prediction of any outcome.
Our firm
Who handles the case
Migir Ilganayev, Esq. founded Ilganayev Law Firm, PLLC in 2017, the same year he was admitted in New York. He is also admitted in New Jersey and Florida.
- Practising since
- 2017
- Admitted in
- New York, New Jersey and Florida
- Law school
- New York Law School
- Appears in
- State and federal courts
- B.A., Political Science and Philosophy of Law, Brooklyn College, City University of New York, 2012
- J.D., New York Law School, 2015
- Judicial intern to the Hon. Martin M. Solomon, Kings County Supreme Court
- Public Service Certificate for pro bono service
How it works
How your case moves
This is the shape of a defended merchant cash advance lawsuit. A judgment already entered, or an account already frozen, runs on its own track alongside it.
Every case turns on its own agreement, facts and procedural posture. Nothing on this site is legal advice or a prediction of any outcome.
FAQ
Questions people ask at this stage
Can a New York creditor just take money from my Michigan bank?
Not as a single step. New York gives a judgment creditor instruments that work within New York, and reaching an account held in another state involves that state procedures as well. Two systems, two sets of requirements, and they are not interchangeable.
Which of them a creditor uses depends on where the bank is, where it does business and what the creditor is trying to reach. It is a question for counsel in each state rather than a single answer.
Which questions are New York questions?
Whether the judgment should exist at all. How it was obtained, whether service was proper, whether a default ought to be vacated, and whether a confession affidavit met the statutory requirements. All of those are decided by the New York court that entered the judgment in the first place.
Which questions are Michigan questions?
What a judgment can reach here once it is recognised, which exemptions apply, and how a creditor has to go about it procedurally. Those questions need counsel admitted in Michigan, and they are about collection rather than about the merits of the underlying claim.
Where should I spend my effort?
Usually on the New York side first, because an attack that succeeds there removes the foundation for everything built on top of it. Fighting a collection step while leaving the judgment itself intact treats the symptom, and it leaves the creditor free to come back at a different asset later.
Free consultation
Book a consultation
Pick a time that suits you, then a few short questions about what arrived and when. It takes about two minutes, and the consultation is free.
- The call is with Migir Ilganayev directly, not an intake desk.
- He asks what arrived and when.
- He reads the agreement and the payment history against each other.
- He tells you where you stand and what the options are.
- The consultation is free. Fees for representation are discussed on the call and depend on the matter.
- No obligation. Sending it does not create an attorney-client relationship.
- If it is urgent, calling is faster than writing.
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Bring the judgment paperwork and whatever the bank sent you. What a New York creditor can reach outside New York runs through a second set of procedures.
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