New York Debt Relief

Credit Card Debt law in New York provides creditors with a 6-year time limit on filing suit for unpaid debt, including Credit Card Debt. This Statute of Limitations (SOL), starts from the first missed scheduled payment and remains static. Subsequent partial payments will not affect the SOL. When debtors are served a summons, they have only 20 days for filing an answer, or else a default judgment will be entered. Debtors should file answers by certified mail to ensure this does not happen.

Judgment Enforcement

New York judgments must be collected within 20 years. The judgment interest rate is 9% per year. Creditors may attach both personal and real property to collect the debt. The judgment becomes a lien on real property once docketed in the appropriate county. Homestead exemption is allowed in the amount of $10,000.

Wages may be garnished, but 90% of the income is exempt. When other garnishments exist, the total garnished may not exceed 25%. In order to garnish wages, the judgment must first be executed against the debtor. If the debtor does not make payment within 20 days, then garnishment may begin.

New York State recognizes contracts with “confession of judgment” clauses. This language has the same effect as a court- ruled debt judgment. However, a “confession of judgment” cannot be entered if the debtor is deceased.

Debt Settlement

Rather than face a court-ordered payment plan, wage garnishment or property seizure, New York residents can arrange for a Debt Settlement plan with the creditor. Debt Settlement allows the debtor to make interest free payments over time, avoiding bankruptcy and a court judgment.