How New York’s Statutes of Limitations on Debt Protect You
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The statute of limitations on debt in New York state is three years. This is the amount of time that a creditor or debt collector has to sue borrowers to collect debts. After three years pass without activity on the account, a creditor or debt collector may still try to sue you for a debt, but you can use the statute of limitations as a defense in the lawsuit.
Written by Attorney Tina Tran.
Updated August 21, 2023
What Is the Statute of Limitations for Debt in New York?
The New York statute of limitations for consumer debt is three years. This means creditors or debt collectors have three years to try to collect on an unpaid debt or sue you for a debt. After this time limit has expired, the debt is considered time-barred. While creditors can still sue you for time-barred debt, in most cases you can raise the statute of limitations as a defense to get the case dismissed.
This three-year limit is part of a new law that went into effect on April 7, 2022, called the New York Consumer Credit Fairness Act (CCFA). Consumer credit generally means credit extended to individuals (consumers) rather than businesses. Consumer credit transactions involve different types of debt like credit card debt, personal loans, and car loans.
The CCFA applies to original creditors like credit card companies and debt collectors alike. It amends the New York Civil Practice Laws, which is the state law governing limitations periods.
It's important to understand that the statute of limitations only stops lawsuits. So, even if a debt is time-barred, debt collectors can still try to collect on it. Lenders or debt collectors can still call you or report the unpaid debt to credit reporting agencies.
This debt may appear on your credit report for seven years. That timeline comes from the federal Fair Credit Reporting Act (FCRA), which is different from New York’s statute of limitations for consumer debts.
How the Consumer Credit Fairness Act Protects You
In addition to reducing the statute of limitations from six years to three years for consumer credit transactions, the law provides additional protections. Under the CCFA:
Once the statute of limitations has expired, it can’t be revived or extended if you make a payment or affirm that you owe a debt. This wasn’t the case prior to the law being passed.
Debt collectors, including original creditors, must provide notice to the court when filing such a lawsuit. In turn, the clerk of the court will send this notice to you. This ensures you’re aware of the lawsuit and have time to dispute it.
Debt buyers and collection agencies must prove that they own the debt and have the right to sue you to collect it. The debt collector must show the full chain of custody of the debt, even if it was transferred through multiple entities. If the debt buyer can’t prove that they own the debt, the case will be dismissed.
Every debt collection lawsuit must include certain information about the debt account, such as the name of the original creditor, the date and amount of the last payment, and the last four digits of the account number.
Other Relevant New York State Statutes of Limitations
As with all states, New York has different statutes of limitations for different situations. Here are some relevant examples:
There’s no statute of limitations for residential tenants to bring a lawsuit to recover overcharges on rent by a landlord. But if you want to recover damages or penalties beyond the overcharge, you must file a lawsuit within six years.
To enforce child support, alimony, or maintenance orders, you must bring a lawsuit within 20 years of the date of default.
Hospitals or healthcare professionals must file lawsuits to collect on medical debt within three years of treatment. This is new as of April 3, 2020.
There’s a three-year statute of limitations for the recovery of property, damages for detaining property, property damage, most personal injuries, and malpractice except for medical and dental malpractice.
If you want to collect damages for medical malpractice, dental malpractice, or podiatric malpractice, the statute of limitations is two and a half years.
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What Are Your Rights When it Comes To Debt Collectors?
Debt collectors are governed by both federal laws and New York state laws. These laws limit what debt collectors can and can’t do when attempting to collect a debt from you.
The Fair Debt Collection Practices Act (FDCPA) is the main federal law governing third-party debt collection practices. The FDCPA applies only to debt buyers and collection agencies, not to original creditors.
Still, the FDCPA provides New Yorkers with important protections and rights. It prohibits third-party debt collectors from engaging in unfair or illegal practices like harassment, abuse, or false and misleading practices.
How To Deal With Debt Collector Harassment or Misconduct
The Federal Trade Commission (FTC) and the federal Consumer Financial Protection Bureau (CFPB) enforce the FDCPA. If you think a debt collector has violated the FDCPA by harassing or misleading you, you can file a complaint with either entity.
You can also file a legal action against the debt collector for an FDCPA violation. The FDCPA allows you to recover actual damages plus up to $1,000 at the court’s discretion. If you think a debt collector has violated the FDCPA regarding one of your debts, it’s a good idea to get in touch with a New York consumer attorney as soon as possible.
What if You Get Sued for a Time-Barred Debt?
If you get sued for an old debt, you should respond to the lawsuit by filing an answer to the complaint. This is true even if the debt in question is past the statute of limitations (aka time-barred). If you don’t file an answer, you’ll lose the debt collection case and the judge will issue a default judgment to the debt collector. Most debt collectors win debt collection lawsuits through default judgments. Don’t let that happen to you! If the debt collector wins, you may be subject to wage garnishment unless you can have the judgment vacated in court.
The statute of limitations doesn’t automatically block lawsuits from being filed and the court doesn’t check each lawsuit to see whether the statute of limitations has passed. Instead, the statute of limitations is a defense.
That means that if you’re sued for a time-barred debt, it’s your responsibility to file an answer and alert the court that the statute of limitations for the debt has expired. When you do, you may be able to get the case dismissed and possibly even recover money from the debt collector if they violated the FDCPA.
If a debt is time-barred, the FDCPA prohibits a debt collector from threatening to file a lawsuit, or threatening to take action that would require them to win a lawsuit, such as wage garnishment or bank levy. If you suspect a debt collector has violated the FDCPA in an attempt to collect from you, it’sIa good idea to seek legal advice from a New York attorney before filing an FDCPA lawsuit. You can also file a complaint with the CFPB and/or the New York attorney general.
What if You Can’t Pay a Debt That’s Not Past the Statute of Limitations?
Three years is a short statute of limitations compared to other states, but the limitations periods may feel long if you have unpaid debt you can’t repay. If this is the case, look into your debt relief options. You may be able to negotiate your debt with the debt collector or try for debt settlement. Remember, the debt collector purchased the debt from a debt buyer for pennies on the dollar. Because of this, they may be open to you making a partial payment and settling the rest of the debt.
