• Elizabeth Fairbanks-Fletcher

New NYS law gives consumers new rights against collectors

Updated: Sep 5

As of April 7, 2022, creditors are prohibited from suing or threatening to sue on a debt older than three years, down from six years

Good news for consumers in New York State! The Consumer Credit Fairness Act of 2021, which went into effect on April 7, 2022, makes important changes regarding the collection of debt. Of significance is a reduction in the collection statute from six years to three years for the debt collector to file a lawsuit on an unpaid debt. This time reduction will compel creditors to file claims in a timely manner and protecting consumers from excessive interest charges and late fees.

The law makes the following additional changes:

  • Requiring a notice to be mailed to the defendants in consumer credit actions by the clerk of the court, ensuring that defendants are given notice of the lawsuit;

  • Requiring court filings to include more information about the debt targeted in a lawsuit, such as identifying the debt or account and providing proof that the debt is owed to the plaintiff;

  • Establishing specific requirements for applications for default judgments in consumer credit actions to prevent debt buyers from suing on expired debt.

Consumers are cautioned that until April 7, 2022, if they make a payment on a debt that is too old for a lawsuit, the payment may renew the creditor’s ability to sue them for the full amount of the old debt.

Attorney General James urges New Yorkers to know their rights and to report debt collectors to her office if they fail to follow the law or if they engage in conduct that is deceptive, harassing, or abusive. Consumers who are having these experiences with debt collectors are urged to file complaints with OAG online or to call OAG’s consumer helpline at 1-800-771-7755.

If you need help with a consumer credit lawsuit, or need to file bankruptcy, contact us today.

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