On November 8, New York Governor Kathy Hochul promulgated the law Consumer Credit Equity Act (Act) (Legislation S.153 / A.2382). The law amends the provisions of New York law and rules of civil practice, commonly known as CPLR, and judicial law to require original creditors and third party debt collectors to include certain information and documents when filing and the pursuit of debt collection actions. The law also shortens the limitation period for bringing a debt collection action from six years to just three years and ensures that a payment on the debt does not restart or revive the limitation period.
New information and documentary requirements when filing and pursuing a debt collection action
The law includes a host of new requirements related to filing and pursuing debt collection actions. For example, a plaintiff in a debt collection action must attach the contract on which the action is based – or the statement of write-off if the debt relates to a revolving credit account – and the complaint must include the name of the creditor of origin, the last four digits of the account number, the date and amount of the last payment and certain other information depending on the type of account in question.
The Act also requires that a plaintiff in a debt collection action provide a completed “notice of further prosecution†to the clerk when filing proof of service of the complaint. The additional notice of prosecution, which the clerk will then send to the defendant consumer, must include the names of the plaintiff, the defendant, the original creditor, the index number of the case and a translation into English and Spanish of the rights of the defendant and responsibilities with regard to the prosecution. Similar notice is required if a plaintiff files a motion for summary judgment.
If a third party debt collector wishes to obtain a default judgment, the law requires the debt collector to submit supporting affidavits from the original creditor, any previous assignor or seller of the debt, and a witness for the collector who can verify. the debt title chain. All plaintiffs seeking a default judgment must also include an affidavit, stating that the statute of limitations for performing the debt has not expired.
This part of the law will come into force on May 6, 2022.
Limitation period for debt recovery actions
Perhaps the most remarkable provisions of the law are those relating to the limitation period for filing a debt collection action. By law, the statute of limitations for filing a debt is reduced from six years to three years. In addition, consumer payment of the debt or “written or oral affirmation” of ownership of the debt does not revive or extend the limitation period.
This part of the law will come into force on April 6, 2022.
