New York’s state law approaches debt collection practices similar to the federal Fair Debt Collection Practices Act (FDCPA). New York General Business Law Sections 600 to 603 provides guidelines governing debt collection behavior. Some rules include:
- Debt collectors cannot charge you fees or collect an amount greater than what you owe
- Collectors cannot try to collect on an invalid debt
- Creditors can never threaten or misrepresent him or herself when contacting a debtor
- Collectors may only contact debtors between 8am and 9pm unless you indicate otherwise
- Collectors must send all correspondence in an unmarked envelope--no postcards or stamps outside the envelope indicating it is from a collections agency
- The collector cannot misrepresent documents by making correspondence appear to be legal documents when its not
- If you are being represented by an attorney, the debt collector must communicate with you through your lawyer
- You can dispute the debt in writing within 30 days of receiving the first notice--the collector cannot contact you again until your notification mails
Additionally, New York City has regulations that collectors must furnish proof that you are the individual who owes the debt. However, New York does not allow consumers to sue collectors. This means that consumes should refer to the federal Fair Debt Collection Practices Act (FDCPA) for pursuing legal matters against collectors that violate the law. Consumers can receive up to $1,000 in damages if the debt collector violates the law.
New York Statue of Limitations (SOL)
New York has a six-year statue of limitation (SOL) on open accounts such as credit cards, meaning that the creditor can contact you for up to six years. For written contracts creditors can also pursue you for up to six years. Consumers can consider New York debt settlement during the time the account remains open.
New York debt relief law provides areas of protection for debtors in terms of wage garnishment. Some areas include :
- Pensions: New York provides broad protection for IRAs, Keoghs and 401(k) in addition to state registered private pension plans. State workers pensions are protected too
- Public benefits/assistance-- New York provides exemption for public benefits only if the debtor has filed bankruptcy
- Insurance and annuities protection in New York includes life, disability or illness
New York Credit Card Debt Relief Act of 2010
The Credit Card Debt Relief Act of 2010 has streamlined the methods for repaying debt and regulated how collectors work with debtors. The Act has impacted debt relief collections several ways:
- The number of fraudulent or weak performing credit card companies are gone
- Reduces the chances of falling victim to fraudulent debt settlement companies due to new Federal Trade Commission (FTC) reforms
- Increased, open communication from creditors--more information is provided to help you eliminate your loans
- Debt settlement companies cannot request upfront fees from clients