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Restraining Notice
Also called CPLR 5222 notice, asset restraint, account freeze.
A post-judgment document served by a judgment creditor's attorney that freezes a judgment debtor's accounts and property in the hands of banks and other third parties, without any further trip to court.
Drafted with AI assistance and checked by a person. Its factual claims were verified against the sources listed at the end, by Find Me Funders research desk.
What it means
Once a money judgment exists, enforcement in several states can begin with a piece of paper signed by the creditor's lawyer rather than an order from a judge. New York's version, under CPLR § 5222, is the one most commercial finance disputes end up in, because so many funding agreements select New York courts.
Service on a garnishee — a bank, a payment processor, a customer who owes you money — obliges that party not to transfer or pay over property in which the judgment debtor has an interest. Service on the debtor obliges the debtor not to dispose of property. The restraint is not limited to what the garnishee happens to be holding at the moment of service: CPLR 5222(b) reaches "all property in which the judgment debtor or obligor is known or believed to have an interest then in and thereafter coming into the possession or custody of such a person", and all debts then due and thereafter coming due. The ceiling works from the other end — a garnishee that withholds an amount equal to twice the amount due on the judgment has done enough, and the notice is then not effective as to other property or money. A notice served on someone other than the judgment debtor runs for one year, or until the judgment is satisfied or vacated.
What it does to a business inside a day
Operating accounts stop moving. Cheques bounce, ACH debits return, payroll fails. Because the same creditor can serve several banks and can also serve your customers, the freeze can hit money that has not reached you yet and can tell your customers you have a judgment against you.
How it differs from the other enforcement tools
Duration, renewal and exemption rules are set by the state's statute and change; check the current text and get local counsel the day you learn of one.
Where this one catches people
The exemption protections that keep a household afloat are built for natural persons and consumer funds. A business operating account has no equivalent shield, and the restraint does not care that the balance was earmarked for payroll, for sales tax you hold for the state, or for the trust portion of a customer deposit. Those obligations keep running while the account is frozen.
The other surprise is timing. You usually learn about it from your bank, after the freeze, not from the creditor. If the judgment came from a confession of judgment or a default judgment entered in a distant forum you never appeared in, the first notice of the whole proceeding can arrive as a frozen account. Whatever the route, treat it as immediate: the remedies that exist — vacating the judgment, moving to quash, negotiating a release — are all time-sensitive and none of them are self-executing.
Where you will meet this term
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Sources and checks
Every figure on this page traces to a document someone read, on a date. Where a check is past its review date it says so rather than passing as current.
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A restraining notice can be issued by the judgment creditor’s attorney as an officer of the court, without a further application to a judge
definition"A restraining notice may be issued by the clerk of the court or the attorney for the judgment creditor as officer of the court, or by the support collection unit"
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The restraint reaches after-acquired property and debts coming due, not only what the garnishee holds at the moment of service
definition"All property in which the judgment debtor or obligor is known or believed to have an interest then in and thereafter coming into the possession or custody of such a person ... and all debts ... then due and thereafter coming due to the judgment debtor or obligor, shall be subject to the notice"
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The twice-the-judgment figure is a ceiling on the garnishee’s obligation, not a description of what the restraint reaches
definition"If a garnishee served with a restraining notice withholds the payment of money belonging or owed to the judgment debtor or obligor in an amount equal to twice the amount due on the judgment or order, the restraining notice is not effective as to other property or money."
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A restraining notice served on a garnishee runs for one year unless the judgment is satisfied or vacated first
definitionIt remains effective "until the expiration of one year after the notice is served upon him or her, or until the judgment or order is satisfied or vacated, whichever event first occurs."
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Levy, by contrast, is executed by the sheriff serving the execution on a garnishee or seizing property
definition"The sheriff ... shall levy upon any interest of the judgment debtor ... in personal property not capable of delivery, or upon any debt owed to the judgment debtor ..., by serving a copy of the execution upon the garnishee"; property capable of delivery is taken "into custody".
Restraining Notice — common questions
What does restraining notice mean?
A post-judgment document served by a judgment creditor's attorney that freezes a judgment debtor's accounts and property in the hands of banks and other third parties, without any further trip to court.
Where does restraining notice catch people out?
The exemption protections that keep a household afloat are built for natural persons and consumer funds. A business operating account has no equivalent shield, and the restraint does not care that the balance was earmarked for payroll, for sales tax you hold for the state, or for the trust portion of a customer deposit. Those obligations keep running while the account is frozen.
Is restraining notice the same as an interest rate?
Restraining Notice is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does restraining notice apply to?
Merchant Cash Advance, Working Capital, Term Loan.
Is there a worked example of restraining notice?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside restraining notice?
Collections, Confession of judgment, Garnishment, Judgment, Judgment lien.
Has this definition been checked?
Yes. Its claims were verified against the sources listed at the end of this page, and the reviewer is named.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.