What is Debt Collection Under New York State Law?

A debt collection case under New York State law is typically a breach of contract action where someone has obligated themselves or their company or organization for a certain financial obligation and for one reason or another they have failed to make a payment under that obligation. There may be a defense to the underlying contract or there may be defects in the workmanship for the services that were performed. It could be that the company is insolvent and they failed to pay for one reason or another. Typically, collection activity ensues and a lawsuit might be commenced to try to collect that debt.

What Types of Debt Collection Cases do You Typically Help Your Clients With?

I handle a lot of different debt collection cases. I work on hundreds of credit card debt cases, which is the simplest kind of breach of contract case. Many people have a lot of credit card debt and sometimes they can’t pay it. There are also defaulted car loans or car leases and medical bills that can be negotiated and defended against. Almost any kind of personal financial obligation can be litigated if there is some defense to the underlying debt.

What is a Judgment And a Default Judgment? When Are They Awarded by Court?

A regular judgment is awarded by the court either after a motion for a judgment, which is called summary judgment, or there is a trial where a party is awarded a monetary judgment in a case. In a typical case, it can take anywhere from a year to three or four years to get to the judgment stage after a trial. A default judgment is when somebody simply fails to answer the summons as it was originally served on them. Depending on how the summons was served in New York State, you either have 20 or 30 days to file an answer. If you don’t file an answer within the 20 or 30 days, a default judgment can be entered against you, which is the same as a judgment after a trial. It’s just based on the fact that the defendant failed to appear and defend the underlying case.

What is Wage Garnishment? When is this Tactic Employed?

Wage garnishment is a judgment collection method that is utilized in New York State. Currently, in New York State, an employee’s wages can be garnished 10% of their wages per pay period if they have a judgment and that will continue until the judgment is ultimately paid off. A judgment can be settled any time there is a wage garnishment or a person can file bankruptcy also and that would vacate the wage garnishment. A party can only have one wage garnishment at one time. If they get two, the first one will continue to be paid until that is paid off and then the second one will kick in and would be 10% of the employee’s wages per pay period.

How Long Are Court Judgments Enforceable For?

A New York State Supreme Court judgment is enforceable for 20 years. It’s a very long period of time, one of the longest in the country.

Is it the Same as The Statute of Limitations?

The statute of limitations in New York is a fairly long statute compared to other states. In a breach of contract action, the statute of limitations is six years. Other states are sometimes three or four years, but New York has a six-year statute of limitations for a breach of a contract case.

Should Someone Try to Work Out a Payment Plan if They Have Been Sued by a Creditor?

A payment plan is one way of resolving a debt collection case. There are other ways to resolve a debt collection action as well. It all depends on the particular circumstances of the individual, such as if they are working, if they are making money, or if they have non-exempt income and assets. All these things are factored into determining whether to enter into a payment plan or whether or not to either avoid a judgment, file bankruptcy or defend the case on its merits.

Do People And Their Creditors Actually Have to Attend Court in These Cases?

If people are representing themselves then they should attend court otherwise they would get a default and a default judgment against them. If it’s a case that my office is handling for a debtor or an individual, I would appear in court on their behalf so there would be no need for them to appear personally. Everything would be handled by my office and the client wouldn’t have to appear in court unless the case went to trial and the defendant needed to testify.

Should Someone File Bankruptcy in Response to a Creditor Lawsuit?

Whether someone should file bankruptcy in response to a creditor lawsuit depends on the person’s individual circumstances. These circumstances can include whether they have income or assets, if they are only getting social security or disability or retirement benefits, how much debt they have, how much income they have, what are their monthly expenses and how much the liability is as far as the individual lawsuit. These are all factors to take into consideration when deciding whether or not to file a bankruptcy.

Additional Information on Debt Collection in New York

Most people don’t know what to do when they get a summons and complaint and sometimes people ignore it which is the absolute wrong thing to do. Whether they appear in court and file an answer themselves or whether they hire an attorney such as myself to handle it, it’s always better to at least defend the case and ask for verification for the amount that’s being claimed; from there it’s possible to get some kind of a settlement. A lot of people get two, three, four or more summons from creditors and they don’t know what to do. My office can handle an unlimited amount of creditor lawsuits for an individual. I really put people at ease once they have me come in and I handle the debt collection cases.

For more information on Debt Collection in New York, a Free initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (914) 686-3171 today.