By: Robert J. Nahoum
You are surprised to be receiving phone calls and letters from a debt collector; you thought you cleared up all your bad debts years ago. How can they still be contacting you on such old debts?
In New York, a debt collector must maintain reasonable procedures for determining the statute of limitations applicable to a debt it is collecting and whether such statute of limitations has expired.
If a debt collector knows or has reason to know that the statute of limitations for a debt may be expired, before accepting payment on the debt, the debt collector must provide the consumer with clear and conspicuous notice,
(1) the debt collector believes that the statute of limitations applicable to the debt may be expired;
(2) suing on a debt for which the statute of limitations has expired is a violation of the Fair Debt Collection Practices Act,
(3) if the consumer is sued on a debt for which the statute of limitations has expired, the consumer may be able to stop the lawsuit by responding to the court that the statute of limitations has expired;
(4) the consumer is not required to provide the debt collector with an admission, affirmation, or acknowledgment of the debt, a promise to pay the debt, or a waiver of the statute of limitations; and
(5) if the consumer makes any payment on a debt for which the statute of limitations has expired or admits, affirms, acknowledges, or promises to pay such debt, the statute of limitations may restart.
To comply with this rule, most debt collectors attempting to collect debts in the state of New York include the following language
“We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice:
Your creditor or debt collector believes that the legal time limit (statute of limitations) for suing you to collect this debt may have expired. It is a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., to sue to collect on a debt for which the statute of limitations has expired. However, if the creditor sues you to collect on this debt, you may be able to prevent the creditor from obtaining a judgment against you. To do so, you must tell the court that the statute of limitations has expired. Even if the statute of limitations has expired, you may choose to make payments on the debt. However, be aware: if you make a payment on the debt, admit to owing the debt, promise to pay the debt, or waive the statute of limitations on the debt, the time period in which the debt is enforceable in court may start again.
If you would like to learn more about your legal rights and options, you can consult an attorney or a legal assistance or legal aid organization.”
The Fair Debt Collection Practices Act (FDCPA for short) is a federal law that regulates the collection of consumer debts by third party debt collectors like collection agencies, junk debt buyers and collection law-firms. The FDCPA generally prohibits the use of false, deceptive and harassing debt collection tactics. If a debt collector violates the FDCPA, it can be sued for statutory damages up to $1,000.00, actual damages (like pain and suffering) and the debt collector may have to pay for the consumer’s attorney.
Among the conduct the FDCPA prohibits is the suing on a debt that is beyond the statue of limitations. In fact, not only is suing on a time barred debt prohibited by the FDCPA, even threatening to sue on a timer barred debt is a violation.
The way one court explained it “time-barred lawsuits are […] unjust and unfair as a matter of public policy”. Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480, 1488 (M.D. Ala. 1987).
WHAT YOU SHOULD DO:
In New York, while it is legal for a debt collector to try and collect on a time-barred debt, they must give the proper discloses and they may not sue to recover that debt.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and the Hudson Valley, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C