New York Governor Hochul signs the Consumer Credit Fairness Act, which brings significant changes to the state’s debt collection policies Goodwin


[author: Amelie Hopkins]

On November 8, 2021, New York Governor Kathy Hochul signed the Consumer Credit Fairness Act. The law is expected to have a significant impact on debt collection procedures filed by creditors or collection agencies in New York. The law not only shortens the limitation period for filing a debt collection claim, but also imposes new registration and notification obligations on the parties who file a debt collection claim.

First, the law significantly shortens the statute of limitations for most consumer debt collection actions from six to three years. In addition, consumer payments on the debt or written or oral confirmation from the consumer of ownership of the debt will no longer result in a restoration or extension of the statute of limitations. Previously, the six-year statute of limitations could be restored or extended by confirmation of a debt by a consumer or by making payments on the debt. The new three-year limitation period comes into force on April 6, 2022.

Second, the law introduces several new requirements for filing and prosecuting a debt collection claim. Creditors or debt collection agencies who file a debt collection claim must enclose the contract or written document on which the claim is based or, in the case of a revolving credit account, the write-off declaration. The complaints submitted must include additional information about the guilt. For certain types of claims, the complaint must also be accompanied by additional information such as collection costs and fees from the original creditor.

Third, the law imposes new notification requirements on creditors or debt collection agencies who bring an action for collection of a consumer debt. The additional notice must include, among other things, the names of the obligee or collection agency, the consumer, the original obligee, the case index number, and the consumer’s rights and obligations in relation to the judgment.

Finally, the law also issues additional affidavits if a third party debtor applies for a default judgment to collect a consumer debt. The law requires that the application for default judgment be accompanied by an affidavit from the original creditor. Any subsequent assignee or seller of the claim must also make an affidavit. In addition, the plaintiff must enclose an affidavit from a witness who can verify the title chain of the debt. All parties requesting the default judgment must also enclose an affidavit stating that the limitation period for the collection of the claim has not expired.

The new registration requirements come into force on May 6, 2022.


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