In New York, federal FDCPA (Fair Debt Collection Practices Act) and state laws regulate debt collection activities. Fair Debt Collection Practices Act applies to everyone throughout the country to protect consumers from deceptive and unfair debt collection. When looking to claim unpaid debt, it is important to understand debt collection laws in New York state.
In an effort to end predatory debt collection practices, legislation has been signed. Consumer Credit Fairness Act is the law that regulates New York debt-collection lawsuits. This New York debt collection law is here to offer enhanced consumer protection. These regulations usually apply to consumer debt purchasers and collection agencies.
Things You Need To Know About Debt Collection Laws In New York State
Here are the important debt collection laws in New York State that you need to know:
Federal Fair Debt Collection Practices Act
This act has set limits on what a debt collector can do with a consumer. These limits usually include:
- This debt collection act keeps debt collectors from talking about your debt to any third party.
- It keeps the debt collector from calling the consumer at work when he has told them not to do this.
- The act makes the debt collector avoid any tactics to harass, mislead, or abuse the consumer.
Moreover, due to the latest changes in the federal debt collection laws in New York State, the debt collector must not threaten the consumer about bringing legal action for a time-barred debt. This is a consistent change in the debt collection act according to which threat of lawsuit after the expiration of the statute of limitations violates FDCPA.
Consumer Credit fairness act in New York State
This debt collection law keeps consumers from facing debt-collection lawsuits. New York enacted a new CCFA in November 2021. This new rule has modified the New York CPLR with the expansion of consumer protections. The CCFA relates to debt collection activities. However, it’s different from FDCPA because it is more focused on how debt collection occurs in New York State.
Well, CCFA’s key provisions include:
- The statute of limitations has been reduced to 3 years for all debt collection actions, including consumer debts.
- Any consumer making payments on debt don’t reset or revive the deadlines of the statute of limitations.
- It’s important for debt collectors must notice the consumers about the lawsuit. They also need to provide information to defend the lawsuit. A lawsuit notice must explain to the consumer what could happen to him if he doesn’t respond to the lawsuit.
- Any debt collector suing a consumer can’t obtain a default judgment, even if the debt collection notice is undeliverable.
- The complaint must have the original agreement’s copy giving rise to the obligation of the consumer to pay the debt. The complaint must include a charge-off statement’s copy
- for credit card debt.
- In a debt collection lawsuit, the debt collector has to provide certain information. These generally include the original consumer’s identity, account number’s last four digits, when the last payment occurred, the last paid amount of debt, and total debt amount breakdown.
Information required by debt collectors
Companies purchasing debts are becoming more popular every day. On the other hand, the industry of debt buyers is notorious for having little or even no information regarding debts it collects or purchases.
Debt collection laws in New York State have also included debt buyers into the law to combat abuses in debt collection. Also, New York is providing more information to consumers about pursuing debts.
Moreover, the New York debt collection regulations require collectors to provide specific information. Debt collection firms can collect this information either in the initial contract or within 5-days of the initial contract.
Debt Collection Laws In New York State
General information about consumer’s rights
The debt collector has to provide consumers with a list of debt collection activities against the FDCPA (federal Fair Debt Collection Practices Act). Also, the general information letter must include the income types protected from the collection of the debt collector to get a judgment against the consumer.
The debt collection firms have to provide information about the original creditor’s identity and the debt’s itemized accounting. More and more companies now are buying debts, and the new trend is that these debts are sometimes very old.
Due to this, the consumer usually doesn’t recall what the debt was for originally. If your debt collector doesn’t provide you with this information, they won’t comply with the new lawsuit’s regulations for debt collection laws in New York State.
Therefore, debt collectors must provide their consumers with information about their debt. The information must include:
- What was the amount of debt originally when the creditor sent it to the collection?
- What’s the interest rate that occurred since being sent to the collection?
- Other charges included in the debt amount
- Payments that the consumer made when sent to debt collection.
Statute of limitations’ information
Information regarding the statute of limitations is highly important for the collector to provide its consumer. This limitation is generally the time limit collector have for debt collection. Some of the debts may be older to collect on under the law applies to those specific debts. Therefore, the debt collector must know if the statute of limitations has passed.
What If The Debt Is Old?
If the debt is too old, then the debt collector should do the following things in this regard:
- Tell the consumer that his statute of limitations has expired already.
- Tell you that it’s an FDCPA violation to sue for debt collection whose statute of limitations has expired. However, credit can get into debt without suing the consumer.
- Without promising to pay the debt, the consumer can restart the statute of limitations. This will make the debt collector sue the consumer for debt collection.
If a consumer can pay the debt, the law provides him more protection.
However, if the consumer and collector are agreed to a renewed payment schedule or any other settlement, the debt collector has to provide an agreement confirmation to consumers within 5 days.
Moreover, if a consumer accepts a payment plan with the debt collection firm, the consumer will entitle to quarterly accounting payments he has made. However, once the consumer has paid his debt off, the collector must provide written confirmation to the consumer within 20 days.
This proof will confirm that the consumer has paid off its debt entirely.