In re Ward

OPINION OF THE COURT

Petitioner seeks an order pursuant to section 150 of the Debtor and Creditor Law canceling a record of judgment in favor of the Industrial Commissioner for unpaid unemployment insurance taxes. Petitioner was adjudicated a bankrupt and duly released from all dischargeable debts on March 16, 1977. The judgment of the Industrial Commissioner had been listed on the schedule of priority creditors.

The commissioner is correct in asserting that unemployment contributions are similar to taxes (W.H.H. Chamberlin, Inc. v Andrews, 271 NY 1, affd 299 US 515), and they are generally exempt from discharge under section 17 of the Bankruptcy Act (US Code, tit 11, § 35; see Matter of Parisi, 8 Misc 2d 260). Nevertheless, the commissioner is estopped from enforcing its lien by subdivision 2 of section 574 of the Labor Law which prohibits collection “unless civil action or warrant proceedings are begun not later than two years after the date of such discharge and their total amount is two thousand dollars or more”. As the commissioner’s lien is for less than $2,000, petitioner’s request for an order canceling the lien should be granted.