Update of debt collection rules: debts can be erased after 3 years

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Consumers get an extra layer of protection thanks to a new debt collection law that will come into force next month.

The limitation period will be reduced from six to three years.

The new law comes into force on April 7, 2022.

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How did this new collection law come about?

The Collection Act is being rolled out as part of the Consumer Credit Fairness Act of 2021.

Governor Kathy Hochul signed the law, seen as a way to improve New Yorkers’ finances.

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

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

What are the specificities of this new debt collection law?

Here are the new rules debt collectors will have to follow in the future in New York:

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

Learn more about the new law here.


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