New York State’s New 3-year Statute of Limitations on Consumer Debt

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By: Robert J. Nahoum

In New York State, there has been a recent change to the statute of limitations for consumer debt collection lawsuits. This change will have a significant impact on both consumers and debt collectors in the state.

Prior to the change, the statute of limitations for consumer debt collection lawsuits in New York was up to six years. This means that debt collectors had six years from the date of the last payment or activity on a debt to file a lawsuit against a consumer in an attempt to collect the debt.

However, in January 2021, the New York State Senate passed a bill called the Consumer Credit Fairness Act of 2021 that reduced the statute of limitations on consumer debt to three years. The bill was enacted on April 7, 2022.

N.Y. Civ. Prac. L. & R. §214-i states:

“Certain actions arising out of consumer credit transactions to be commenced within three years. An action arising out of a consumer credit transaction where a purchaser, borrower or debtor is a defendant must be commenced within three years, except as provided in section two hundred thirteen-a of this article or article 2 of the uniform commercial code or article 36-B of the general business law. Notwithstanding any other provision of law, when the applicable limitations period expires, any subsequent payment toward, written or oral affirmation of or other activity on the debt does not revive or extend the limitations period.â€

Importantly, the new statute of limitations only applied to “consumer credit transactions†which is defined as “a transaction wherein credit is extended to an individual and the money, property, or service which is the subject of the transaction is primarily for personal, family or household purposes.â€Â  This definition excludes commercial and other business transactions.

Another important component of the new consumer debt statute of limitations is that later payments do not restart the 3-year clock.

The reduction of the statute of limitations is significant for several reasons. First and foremost, it means that debt collectors now have significantly less time to pursue legal action against consumers whom they claim owe them money.

Overall, the reduction of the statute of limitations for consumer debt collection lawsuits in New York State is a significant change that could have far-reaching implications for both consumers and debt collectors. While it remains to be seen exactly how the new law will play out in practice, it’s clear that consumers should be aware of their rights and options when it comes to debt collection.

If you need help settling or defending a debt collection lawsuit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202

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