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Debt collection rule update: Debts can get wiped out after 3 years

Consumers are getting an added layer of protection thanks to a new debt collection law that goes into effect next month.


The statute of limitations will be reduced from six- to three years.

The new law goes into effect on April 7, 2022.

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How did this new collection law come about?

The collection law is rolling out as part of the Consumer Credit Fairness Act of 2021.

Governor Kathy Hochul signed the law, which was viewed as a means to improve the finances of New Yorkers.

“For too long, debt collectors used unfair and abusive tactics to improperly collect debts,” said Attorney General Letitia James. “Abusive collection practices of the past hurt low- and moderate-income New Yorkers the most and buried them deeper into financial struggles. These new regulations will give us stronger tools to protect the most vulnerable New Yorkers from predatory collectors.”

The new state regulations come after a similar nationwide update from the Consumer Financial Protection Bureau.

What are the specifics of this new debt collection law?

Here are the new rules that debt collectors will have to follow moving forward in New York:

– Consumers cannot be called more than seven times per day;
– After making contact with the consumer by phone, debt collectors must wait a week before calling again;
– They cannot call between 9 p.m. or 8 a.m. local time;
– Debtors cannot be contact by any or all means of communication. They cannot be contacted at work; and
– Generally speaking, debt collectors will not be able to contact consumers by work email addresses, public social media posts, or through third parties.

Learn more about the new law here.

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