Are you worried about the statute of limitations on debt in NY? You should. There is plenty of debt to go around in the state of New York. And it is worrying.
If you already have many debts you are dealing with, the chances are high that you may be experiencing harassment from debt collectors. For that reason, it would be wise to know just how long creditors can pressure you concerning your debts and whether you have any rights as a debtor.
The New York Debt Situation
Typical New Yorkers are highly indebted, with the average person carrying multiple debts stemming from mortgages, student loans, credit card use and auto loans, among others. For example, the average person in New York carried a credit card balance worth $8,510 in 2019. In addition, a typical New Yorker owes:
- About $35,368 worth of student loan debts
- An auto loan of at least $16,483
- An average mortgage debt of $161,400
It’s no wonder that the state of New York has one of the highest rates of debt delinquency rates in the nation, especially concerning credit cards. For example, in 2017, NY had a delinquency rate of 8.3 percent, which was the eighth-highest at the time.
So, you are right to worry about the credit card statute of limitations in NY or those that apply to any other debt you may have. There is always a risk you could get sued, just when you expected to be free and clear of your debt obligations. And if you are not careful, debt collectors could harass you for a very long time.
Statute Of Limitations on Debt in NY
New York has traditionally had a six-year statute of limitations. The limitation applies to many debts, such as bonds, notes and contracts. Also, when a mistake or fraud occurs, your creditors or those you have injured would still have six years to pursue a case against you.
Once the deadline expires, they could still demand what you owed them. However, they could find it challenging to pursue a legal case against you. All that changed in 2021.
Credit Card Statute Of Limitations in NY
In 2021, the New York governor signed a new law known as The Consumer Credit Fairness Act (CCFA), which reduced the statute of limitations on consumer credit transactions to three years. Some sections of the law are already in operation, but some will begin to apply from April 7, 2022.
As a result of the new law, the New York statute of limitations on credit card debts will go down to three years. The law is meant to protect consumers from unfair debt collection practices.
Statute of Limitations Exceptions
Not every kind of debt is subject to the new three-year or old six-year rule. Some debts have longer limitation periods.
Most statute of limitations have lengthier periods because their enforcement time after judgment has been issued can be extended. Generally, judgments can be extended to have a 20-year statute of limitations. So, that’s something to think about.
For example, the statute of limitations on alimony and child support is 20 years, while a four-year limit applies to a rent overcharge. However, real property and patents have a recovery period of 10 years. On the other hand, for most damages for injury to personal property, the statute of limitations is three years; the same limit applies to medical debts.
It is also worth noting that the IRS can pursue you for taxes for up to 10 years from when your unpaid tax is assessed. So, you may want to take advantage of the six- or three-year statute of limitations that apply to many debts in NY, but fail in your attempts. But if you are amenable, you could voluntarily extend the debt repayment process by up to six years.
Regardless of the statute of limitations that apply to your kind of debt, your financial mistakes could stay on your credit history for anywhere from seven to 10 years. Therefore, you should think carefully about what to do when you owe someone or a company a debt.
Read More: What Happens If You Can't Make Federal Tax Payments?
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- Student Loan Hero: New York Student Loans: Debt Stats, Repayment Programs and Refinancing Loans
- Experian: U.S. Auto Debt Grows to Record High Despite Pandemic
- NewYorkFed.Org: Regional Household Debt and Credit Snapshots
- NY.US: Credit Card Debt in New York State
- Protecting Consumer Rights: New York Statute of Limitations on Debt Collection
- NYSenate.Gov: Governor Hochul Signs Consumer Credit Fairness Act Into Law
- ACA International: New York Governor Signs Statute of Limitations Bill
- Solosuit: Statute of Limitations on Debt in New York
- Nolo: Time Limits on IRS Collections
I hold a BS in Computer Science and have been a freelance writer since 2011. When I am not writing, I enjoy reading, watching cooking and lifestyle shows, and fantasizing about world travels.