What Are the New 2022 Debt Collection Laws? (2024)

The New YorkConsumer Credit Fairness Act (Act), which amends the New York Civil Practice Law and Rules (CPLR), significantly impacts debt collection lawsuits filed in New York state courts by creditors and third-party debt collectors.

Effective April 7, 2022, the New York statute of limitations for debt collection lawsuits arising out of a consumer credit transaction is reduced from six years to three years. Also, payment toward the debt or written or oral affirmation of the debt by the consumer does not revive or extend the limitations period.

Effective April 30, 2022, the Fair Consumer Judgment Interest Act reduces the annual rate of interest on judgments arising out of a consumer debt where the defendant is a natural person from 9% to 2%. The reduced rate will apply not only to judgments entered on or after the new law’s effective date but will also apply to any portion of a judgment entered before the effective date that is unpaid as of the effective date.

Effective May 7, 2022:

• Plaintiffs must attach to the complaint the contract upon which the action is based.
• The complaint must also include, among other things, the name of the original creditor, the last four digits of the account number, and the date and amount of the last payment.
• Plaintiffs must provide a completed “additional notice of lawsuit” to the court clerk when filing the proof of service for the complaint, which the clerk will then mail to the consumer.
• Third-party debt collector requesting a default judgment must submit supporting affidavits from the original creditor, any prior assignors or sellers of the debt, and a witness for the collector who can verify the chain of title for the debt.
• Plaintiffs requesting a default judgment must also include an affidavit, stating that the statute of limitations to enforce the debt has not expired.