Debt relief in New York: collection rules, time limits and your options
Updated November 9, 2026
New York at a glance (checked November 2026)
| New York | |
|---|---|
| Time limit to sue on credit cards and other consumer credit | 3 years |
| Does a payment restart the clock? | No |
| Wage garnishment for consumer debt | Up to 10% of gross pay, less or nothing for low earners |
| State debt collection rules | Consumer Credit Fairness Act; DFS debt collection rules |
| Extra rules in New York City | Collectors need a city license (DCWP) |
| Where to complain | NY Attorney General, NY DFS, NYC DCWP, and the CFPB |
Debt collection rules in New York
On top of the federal Fair Debt Collection Practices Act, New York's Department of Financial Services has its own rules for collection agencies (23 NYCRR Part 1). Collectors must give you written notice of your rights, including which of your income can't be taken, and must send you documents about the debt if you ask for them.
New York City adds more. Collection agencies that collect from city residents must be licensed by the Department of Consumer and Worker Protection (DCWP), must limit how often they contact you, and must keep records of your preferred language. You can check a collector's license and file a complaint on the DCWP website.
How long creditors have to sue
Since April 2022, the Consumer Credit Fairness Act gives creditors 3 years to sue on consumer credit debts such as credit cards, personal loans and car loans. Before that it was 6 years.
The law also says a payment or a promise to pay doesn't restart the clock. After 3 years the debt is time-barred: a collector can still ask you to pay, but it can't win a lawsuit if you raise the time limit.
The same law made creditors include more detail in a lawsuit, such as the original creditor and the date of default, and requires a court to check those details before granting a default judgment. If you're sued, file an answer by the deadline even if you think the debt is too old.
What can be garnished in New York
After a judgment, a creditor can take part of your pay through an income execution: generally up to 10% of your gross pay, but never so much that your weekly disposable pay drops below a floor tied to the minimum wage. Low earners keep all of their pay.
New York also automatically protects a set amount in your bank account, plus Social Security, SSI, public assistance, unemployment and most retirement money deposited there. The protected amount is adjusted every three years. Your home is protected by the homestead exemption up to an amount that depends on your county.
Ways out of debt in New York
- Nonprofit credit counseling can set up a debt management plan with lower card interest rates. Look for agencies accredited by the NFCC or FCAA.
- Debt consolidation can lower your rate if your credit is still good. Check it with our debt consolidation calculator.
- Debt settlement companies must follow the federal ban on fees before a debt is settled. Settled amounts can count as taxable income.
- Bankruptcy: New York's exemptions protect part of your home equity, a vehicle and retirement accounts.
Where to get help or complain
- New York Attorney General takes consumer complaints, including about debt collectors.
- NY Department of Financial Services oversees collection agencies' state rules.
- NYC Department of Consumer and Worker Protection licenses collectors who collect from New York City residents.
- Consumer Financial Protection Bureau takes complaints nationwide.
- LawHelpNY lists free legal help across the state.
General information about New York law, not legal advice. Checked November 2026.