Who Else a New York MCA Judgment Can Be Served On

Everyone writes about the bank. The statute does not say bank

The standard account of merchant cash advance enforcement goes: judgment is entered, a notice is served on the bank, the account stops working. That is the common case and it is where most of the attention goes.

It is worth reading what the instrument actually says, because it is broader than the common case.

"Any person"

CPLR § 5222 provides that a restraining notice may be issued by the clerk of the court or by the judgment creditor's attorney as an officer of the court, and served upon any person — where it is shown that the person holds property in which the judgment debtor has an interest.

The category is defined by what someone is holding, not by what kind of business they are. A bank qualifies because it holds your deposits. It is not the only kind of party that holds value belonging to a business.

Think about where money sits between a customer deciding to pay you and the funds being available:

• a card processor or payment platform, during settlement;
• a marketplace that collects from end customers on your behalf;
• a factor holding invoices or their proceeds;
• a large customer with an approved but unpaid invoice;
• an escrow or retainage arrangement on a contract.

Whether any particular one of those is a person holding property in which a judgment debtor has an interest, in a particular case, is a legal question on the facts, and this page does not pretend to answer it. The structural point is that the question can be asked about more parties than most businesses expect.

Why that is worse than the bank version

Not because more money is at risk, necessarily. Because of who learns about it.

A bank restraint is embarrassing in a contained way. The parties who know are you and your bank. A notice served on a processor or a significant customer puts a commercial counterparty on notice that there is a judgment against your business — and that is information with a life of its own. Contracts have clauses about it. Credit teams act on it. Platforms have policies.

For a business that is trying to trade its way out of the position, the commercial consequence of a counterparty finding out can exceed the cash consequence of the restraint itself.

And holding is still not taking

The same distinction applies as with a bank. CPLR § 5225 is the step from freezing to collecting: on motion of the judgment creditor and notice to the judgment debtor, where the debtor is shown to be in possession or custody of money or other personal property in which it has an interest, the court may order it paid or delivered toward satisfying the judgment.

So there remains a gap, with a notice requirement in it, between a notice landing and value changing hands.

What to do with this information

Map it, before anything stops.

Write down every party that holds money belonging to the business at any point in its cycle, and for roughly how long. That map is useful in two directions: it tells you where the exposure is, and it tells you which commercial relationships would be damaged by a notice arriving unannounced.

Then deal with the judgment, which is what all of it rests on. CPLR Rule 5015 permits the court which rendered a judgment to relieve a party from it on motion on specified grounds, with the applicable time limit depending on the ground; the excusable-default ground runs within one year after service of a copy of the judgment with written notice of its entry.

Every instrument served on every holder depends on that judgment standing. It is the only place a durable answer exists.

What to do first, from Oklahoma

1. Map where your money sits, and with whom, through a normal week.
2. Get the judgment, the county and the index number, and read the docket.
3. Establish how the judgment arose — defended, defaulted, or confessed.
4. Do not wait for something to stop. Wider exposure is a reason to move sooner, not a different plan.

A restrained account covers the bank version in detail, and how an MCA lawsuit is defended covers the case behind the judgment.