On November 8, 2021, New York Governor Hochul promulgated the “Consumer Credit Equity Act“(S.153). The law contains a series of amendments to the law and rules of New York civil practice that have a significant impact on debt collection lawsuits filed in New York State courts by creditors or agents. recovery.
The main amendments include:
- A 3-year limitation period for most collection actions arising from a consumer credit transaction
- A prohibition on reinstatement or extension of the statute of limitations on the basis of a subsequent payment, written or oral assertion, or other activity on the debt
- When a collection action against a consumer arising from a consumer credit transaction is filed, a specified notice must be submitted to the court by the plaintiff for the court to send to the consumer
- Documentation / information requirements for a collection action arising from a consumer credit transaction, which include:
- The contract or other written instrument on which the lawsuit is based must be attached to the complaint (which for revolving accounts can be satisfied by the statement of charge)
- If the claimant is not the original creditor, the complaint should include the date of the assignment or sale of the claim to the claimant, the name of each former account holder and the date of assignment to that owner, as well as the amount owed at the time of the sale or assignment by the original creditor
- Where summary judgment is sought in a collection action against a consumer resulting from a consumer credit transaction where the consumer is not represented by a lawyer, a specified notice must be submitted to the court by the plaintiff in order that the court sends to the consumer
- When a default judgment is requested in a collection action arising out of a consumer credit transaction by a plaintiff who is not the original creditor, the request for default judgment must include (1) an affidavit from the creditor initial “of the facts constituting the debt, the default, the sale or assignment of the debt and the amount due at the time of the sale or assignment”, (2) for each subsequent assignment, an affidavit of sale of the claim by the seller of the debt, and (3) an affidavit of a witness to the claimant which includes a chain of title to the debt
With the exception of the prohibition on resuming or extending the limitation period which takes effect on February 5, 2022, the other changes described above take effect on March 7, 2022.