New York State Establishes New Rules for Debt Collectors

New York State just took a major step in protecting consumer rights in credit card collection cases.

The state recently updated its requirements for debt collectors when filing credit card collection cases against debtors, aiming to put a stop to default judgments and unfair claims. A default judgment is legally binding, decided when the debtor has not appeared in court or failed to respond to a summons.

Because of this, many debt collectors will attempt to work the system, making unfair claims and providing minimal information, making it less likely for the defendant to appear in court. This typically leads the judge to rule in favor of the collection agency through a default judgment.

Now, debt collectors must be more thorough when filing their claim in the state of New York, making sure to include:

• Affidavits providing detailed proof of the debt
• Documentation detailing the debt’s chain of ownership
• Affirmation that the debtor received notice of the claim

In addition to the requirements listed above, New York debt collectors also must obtain written confirmation from a lawyer certifying that the statute of limitations has not expired on collecting – six years, in the state of New York.

To comply with these new rules, debt collectors now must provide the court with an additional notice of the lawsuit, this way it can be mailed to the debtor at the address where the original notice of the suit was served. If the notice comes back to the court because it was unable to be delivered, no default judgments will be made.

A good majority of these suits are typically filed by third-party companies who purchase delinquent debt. Oftentimes, the debt is already several years old.

These new rules affect all debt purchased from an original creditor after October 1st. As of next July, they will apply to all cases.
If you live in New York, it’s important that you know your credit law rights, and it’s essential for debt collectors to follow these new rules in order to respect those rights.

Believe it or not, it is possible to stop debt collection calls in New York. If you feel your rights are being violated by a debt collector, you need to get your free credit law case review from a qualified credit lawyer right away.

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Further reading: Proof of Default Judgment in Consumer Credit Matters – New York