Statute of Limitations on Debt in the State of New York

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.

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.

​Read More:​ Am I Liable for My Husband's Credit Card Debt in New York?

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.

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.

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.

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