Posted on May 16, 2019 in Debtor and Creditor
In the past, we’ve covered the Fair Debt Collection Practices Act, or FDCPA, in considerable detail. We’ve discussed the basic provisions of this federal law. We’ve also covered some specific examples of behavior which would be violations of this law. The FDCPA applies to third-party debt collectors, not creditors, and because it is a federal law it covers all 50 states in our great union. Though the FDCPA offers protection to all U.S. citizens, states are still free to pass laws on debt collection. If you look around our nation, you’ll find many different collection laws which provide different protections. New York State has its own law which regulates the behavior of debt collectors. New Yorkers therefore have 2 layers of protection: the federal layer and the New York State layer. These layers are designed to ensure that no New Yorker is subject to abusive collection practices.
In this post, we will go over the basics of the New York law on debt collection. As of August, 2015, the New York law on debt collection began to offer additional protection. We will cover the ways in which the NY law differs from the FDCPA. We will also spell out the ways in which the NY law supplements the FDCPA. As we will see, the New York State law places additional hurdles for debt collectors. Among other reasons, these hurdles help to guarantee that the obligations being sought are still valid. Let’s look at the NY regulations in detail.
New York State Debt Collection Regulations Apply to Agencies and Debt Buyers
Like the FDCPA, the New York regulations only apply to certain parties and to specific types of debt. The updated regulations in NY apply to collection agencies and to buyers of consumer debts. These regulations also apply to the original creditors of debts. This aspect of NY law differs from the FDCPA. As we know, the FDCPA does not apply to original creditors. Like the FDCPA, however, these regulations do not apply to business debts.
The inclusion of debt buyers in the New York State regulations is significant. Debt buyers have become increasingly common in the state and throughout the country. Debt buyers often procure debts which are either extremely old or already settled. This trend has created problems for consumers. The new New York State regulations on debt collection are intended to combat this trend. Consumers will be more protected from abuse from debt buyers under the current law.
Collectors Must Provide Certain Information When Pursuing Debts
As we saw, the FDCPA is mostly concerned with barring collectors from taking certain actions. New York State supplements this by adding actions which collectors must take. In order to pursue a debt, New York-based collectors must do certain things. Let’s look at each of these things in turn.
Debtor’s Rights Information
(1) Collectors and debt buyers must provide information about debtor’s rights. The collector or debt buyer must give you the list of behavior prohibited by the FDCPA. The collector must also state the types of income which are exempt from collection in the event of a court judgment. This information is vital to prevent collection abuse. Debtors who possess this information will be able to cope with the debt collection process much more easily. The collector must provide this information within 5 days of establishing contact with the debtor.
Information About the Debt Itself
(2) Collectors must provide specific information about the debt itself. Again, this was done to protect against expired debts being pursued. The same is true for debts which have already been settled. The collector must provide you with the identity of the original creditor, along with a detailed history of the debt. Additionally, the collector must provide the original debt amount, the interest accrued, fees and other charges, and the payments made up to that point. The collector must provide this information, otherwise the debt may not be pursued.
Statute of Limitations Information
(3) Collectors must also give information regarding the statute of limitations. Certain debts are protected by a statute of limitations. This means that collectors may not sue to collect debts which have been outstanding for more than a certain period of time. Collectors may try to collect the debt, however, but they cannot bring a suit in court. Under New York regulations, collectors must state the protections given by the FDCPA, and also let debtors know that they can invoke the privileges of the statute of limitations if they so choose.
Collectors Must Respond Appropriately When a Debt is in Dispute
If a debtor disputes the validity of a certain debt, then New York State regulations provide guidelines for such scenarios. Legally, a collector cannot continue to pursue a disputed debt until the debtor receives certain information in writing. This information must be provided within 60 days of the dispute. The collector must provide debtors with a copy of any contract or application related to the debt. If neither of these documents are available, then the collector may provide any other document which establishes the original debt between the debtor and original creditor. The collector must provide the statement from the original creditor containing the intention to charge-off the debt. The collector must provide a document which indicates how ownership of the debt came from the original creditor. And the collector must also provide information regarding any payments made to the debt up to that point.
Call Us For More Information
As we can see, the New York regulations provide debtors with extra layers of protection against abusive collection practices. Here at Mackay, Caswell & Callahan, P.C., we are quite familiar with debt issues of various kinds. We spend a great deal of time helping our clients resolve their debt and move forward. Our attorneys at MCC applaud the State of New York in its attempt to further aid consumers with these additional protections. And we encourage our readers to reach out should they have an issue related to debt resolution. If you have a debt in need of resolution, contact one of our top New York City tax attorneys for assistance today.