ALBANY – New York Attorney General Letitia James recently sent letters to the largest credit card companies and major debt collectors operating in New York, warning them of new state regulations that prevent them from suing consumers for old debts. A new law protecting debtors goes into effect in April.
The Consumer Credit Fairness Act of 2021 was signed into law last November goes into effect next month and reduces the statute of limitations for consumer debt collection from six years to three years.
“For too long, debt collectors used unfair and abusive tactics to improperly collect debts,” said Attorney General James. “Abusive debt collection practices of the past hurt low- and moderate-income New Yorkers the most and buried them deeper into financial struggles, according to James, who added “I urge any New Yorker who feels that they have been a victim of improper debt collection to contact my office. Consumers have rights and my office is committed to protecting them.”
As of April 7, 2022 creditors cannot sue or make a threat to sue consumers over debts that are older than three years, down from six years in most cases. Moreover, any payment a consumer makes after that three-year period cannot be used to revive the time-barred debt.
The Attorney General noted that consumers are cautioned that if they make a payment on a debt that is too old for a lawsuit before April 7th, the payment may renew the creditor’s ability to sue them for the full amount of the old debt.
The entire text of the new law can be found here.
