New York state's statute of limitations on filing a lawsuit to collect most types of consumer debt is six years. Creditors who win their lawsuits have up to 10 years to collect the judgment, and can ask a judge to renew the judgment for another 10 years after that.
Understanding Statutes of Limitations
The statute of limitations on debt collection defines how long a creditor has to file a lawsuit against the debtor. Once the statute of limitations expires, the creditor can continue to ask the debtor for payment, but can't legally enforce collection of the debt. If a creditor does file a lawsuit after the statute of limitations is up, the debtor can cite that as an affirmative defense and ask the court to dismiss the case.
The Ticking Clock
The statute of limitations begins on the date that the debt goes into default. According to NYCourts.gov, this is around 30 days after the debtor made a payment on the account.
Out of State Creditors
If a creditor's principle place of business is in another state, and that state's statute of limitations is shorter than that of New York, the shorter statute of limitations prevails.
In New York, major credit cards are considered open-ended accounts. The statute of limitations on credit card and other open-ended account debt is six years. The statute of limitations on debt incurred on a store-specific card, such as those issued by Sears or Walmart, is four years.
Other Types of Debt
The statute of limitations on filing a lawsuit to collect debts that are the result of an oral or written contract also is six years. This includes promissory notes, unpaid rent and mortgages.
Statute of Limitations for Judgments
Once a creditor wins a lawsuit against a debtor, the creditor has an initial period of 10 years to attempt to collect the judgment. During that time, the creditor can use various collection methods, including wage garnishment, bank account levies and a lien against the debtor's property. After the statute of limitations is up, the creditor has one year to go back to court and ask for a renewal of the judgment if it hasn't been able to collect. The renewal lasts for another 10 years.
Federal law limits the amount of time that most consumer debts can remain on a credit report to seven years. Credit bureaus can report paid judgments for up to seven years, and unpaid judgments until the statute of limitations on judgment collection expires.This means that a unpaid judgment in New York can remain on someone's credit report for somewhere between 20 and 21 years, depending on how long it takes the creditor to request a renewal.
- Bankrate: Statute of Limitations on Debts by State
- NYCourts.gov: Collecting the Judgment
- Nolo: Time-Barred Debts -- When Collectors Cannot Sue You for Unpaid Debts
- Nolo: How long Does a Creditor Have to Collect on a Judgment Against Me?
- Findlaw: New York Civil Statute of Limitations Laws
- FindLaw: N.Y. CVP. LAW § 5014 : NY Code - Section 5014: Action Upon Judgment
- Federal Trade Commission: Building a Better Credit Report
- NYCourts.gov: Answering a Debt Collection Case
- New Economy Project: Common Defenses to Creditor Lawsuits
Lainie Petersen writes about business, real estate and personal finance, drawing on 25 years experience in publishing and education. Petersen's work appears in Money Crashers, Selling to the Masses, and in Walmart News Now, a blog for Walmart suppliers. She holds a master's degree in library science from Dominican University.