Collection Agencies in New York | Debt Collection Laws

New York Debt Collection Laws

1. Fair Debt Collection Practices Act (FDCPA): Like all states, New York is governed by the federal FDCPA. This law restricts the behavior and actions of third-party debt collectors and prohibits them from using abusive, unfair, or deceptive practices to collect debts from consumers.

2. New York State Debt Collection Laws: New York has its own state laws that govern debt collection practices, which sometimes provide more protections than the federal FDCPA. These laws also apply to original creditors in addition to third-party debt collectors.

3. Licensing Requirements: Collection agencies operating in New York must be licensed and bonded.

4. Statute of Limitations: New York has a statute of limitations that limits the amount of time within which a creditor or collection agency can sue a debtor to collect a debt. The statute of limitations for most consumer debts in New York is six years.

5. Garnishment: If a creditor obtains a court judgment against a debtor, they may be able to garnish the debtor’s wages or bank accounts. There are federal and state limits on how much can be garnished.

6. Exemptions: New York law provides exemptions for certain types of property, which means that they cannot be seized by creditors to satisfy a debt.

7. Communication Restrictions: Both federal and state laws place restrictions on when and how often a debt collector can contact a debtor. For example, they cannot call before 8 a.m. or after 9 p.m., and they must stop contacting the debtor if the debtor requests in writing that they do so.

8. Debt Validation: Under both federal and New York state law, consumers have the right to request validation of the debt. This means that the debt collector must provide proof that the consumer actually owes the debt and that the amount is correct.

9. Substantiation of Debt: New York law requires debt collectors to substantiate the debt upon request, even if the request is made orally, which provides additional protection to consumers compared to the federal FDCPA.

10. Harassment and Misrepresentation: Both the federal FDCPA and New York law prohibit debt collectors from using harassment, oppression, or abuse in connection with the collection of a debt. They also cannot use false, deceptive, or misleading representations to collect a debt.

11. Penalties for Violations: If a debt collector violates the FDCPA or New York’s debt collection laws, consumers may have the right to sue the collector for damages. Please remember to check for the most recent legal updates or consult with an attorney who specializes in debt collection laws in New York for the most accurate information.

12. Consumer Complaints: Consumers can file complaints against debt collectors with the New York State Attorney General’s Office or the Consumer Financial Protection Bureau if they believe the debt collector has violated state or federal laws.

The New York City Consumer Protection Law provides one of the strongest anti-harassment protection in the country regarding debt collection. A debt collector cannot collect or attempt to collect on a payday loan.

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws 

New York Debt Statistics

• Average Student Loan in New York in 2019: $31K.
• According to TransUnion, the average mortgage debt in New York this year is $236K in 2019.
• The average credit card debt in New York as of 2018 is $8,800
  An average New Yorker had an auto loan balance of $16K.
• New Yorker had an average credit score of 692.
• Business bankruptcy cases filed in New York in 2019 were 2055
• New York had paused all collection activity in the state during the Covid-19 pandemic.

New York Geographical Stats

• Population in New York: 19.5 million (year 2018)
• Number of millionaires: 530K  ( year 2018)