New York debt: three years to sue, and no way to restart the clock

Three years for an action arising out of a consumer credit transaction where the consumer is the defendant (CPLR section 214-i), including credit cards and personal loans. Other contract claims generally keep six years under CPLR 213(2).

The three-year limit came from the Consumer Credit Fairness Act, which took effect for these suits on April 7, 2022; before that the limit was six years. Many older guides still say six years; for credit cards and consumer loans that is out of date.

Once the limit expires, any later payment, written or oral affirmation, or other activity on the debt does not revive or extend it.

In many states, a small payment or a promise to pay gives the collector a new time limit. In New York it does not, once the three years have run. The Department of Financial Services told collectors not to suggest that the time limit can be restarted on these debts, and to tell consumers about the change for debts they were already collecting.

A payment made before the three years are up is different and can affect when the clock starts, so check your dates before paying anything on an older account. Federal law also bars suits and threats of suits on time-barred debt.

A creditor needs a court judgment first. After a judgment, an income execution can take no more than the least of 10% of gross income, 25% of disposable earnings, or the amount by which weekly disposable earnings exceed 30 times the higher of the federal or New York minimum hourly wage (CPLR section 5231).

The 10% of gross income cap is what usually applies, which makes New York gentler than the federal 25% limit. A judgment in a medical debt lawsuit brought by a licensed hospital or health care professional cannot be collected through an income execution (CPLR 5231(b)(iv)).

New York's protections sit on top of federal law; our page on stopping a wage garnishment explains both.

Our guide to time-barred and zombie debt explains what collectors may and may not do once the 3-year limit in New York has passed.

Limits vary a lot between states: by comparison, Rhode Island sets 10 years and Alabama sets 3 years for similar debts.

Our guide on how to dispute a debt with a collector applies in New York, with a free sample letter.

If your letter comes from a national company such as Crown Asset Management or Enhanced Recovery Company, our collector guides explain who they are and how to dispute.

If your debt is a medical bill, read what unpaid medical bills can lead to; our page on medical debt and credit reports explains the one-year and $500 rules, which apply in New York too.

Before a New York medical bill reaches court, ask for an itemized bill and apply for financial assistance; see negotiating a hospital bill and your options if you cannot pay medical bills.

For the court side of a New York debt, from the summons to a possible judgment, see how to defend a debt collection lawsuit.

Collectors in New York State must also follow the Department of Financial Services' debt collection rules in 23 NYCRR Part 1, alongside the federal law. The federal dispute right is the same as everywhere: a written dispute inside the validation period makes the collector stop until it mails verification.

Collectors working in New York City also hold a city license, which many print in their disclosures. Credence, Crown and Velocity all list NYC license numbers.