NY Establishes New Rules For Debt Collection

ALBANY (AP) —

New York court administrators on Tuesday adopted new filing requirements for debt collectors meant to prevent unfair claims and defaults in credit card collection cases against consumers.

Creditors will now be required to submit affidavits with detailed proof of the debt, chain of ownership, and confirmation the debtor received notice and that time hasn’t run out on the collection.

More than 100,000 such suits are filed each year statewide, most by third-party buyers of delinquent debt that’s often several years old, according to court officials.

Chief Judge Jonathan Lippman had announced the proposals in May, saying they’re intended to stop default judgments based on “robosigned” affidavits “containing few if any facts relating to the history of the debt at issue.”

The rules apply to debt bought from an original creditor after Oct. 1. Next July, they apply to all cases. Lippman said a few states have some similar provisions, but New York’s are now the most comprehensive.

“While creditors have every right to collect what is legally owed to them, the Judiciary has an obligation to prevent inequitable debt collection practices in the courts,” Lippman said Tuesday.

To Read The Full Story

Are you already a subscriber?
Click to log in!