Far too many New Yorkers have spent years, sometimes even decades, trying to find a way out of debt. These individuals have endured ongoing harassment from creditors as they try to pay what they owe, making life miserable. In fact, the stress associated with this debt can affect other parts of your life, including your marital relationship and your physical and mental health.
Relief has arrived
Fortunately, relief is here. Last year, the Consumer Credit Fairness Act of 2021 was passed, and it went into effect in April. This law strengthens a number of existing consumer protections and makes the debt collection process even more transparent. Here are just some of the protections that are now in place under the law:
- Minimization of contact with consumers: We’ve all heard about or experienced collection agencies calling at all hours of the night or calling multiple times a day to try to secure debt payment. Those days are gone. Under the new law, debt collectors can’t call you more than seven times in any seven-day period, and they must wait a week to call you again if they’re able to make contact with you by phone. Also, you now have the power to restrict the means through which a debt collector contacts you.
- Validation notices: The new law also requires debt collectors to provide you with notice within five days of initial contact to inform you of the debt, when it was incurred, and to whom the debt is owed. This provides transparency as far as what you actually owe and why.
- Disputing a validation notice: If you dispute a debt that you’ve been notified of, then you must be informed of the dispute process. At the time that you dispute a debt, all collection practices must cease.
- Shorter statute of limitations: One of the key aspects of the new law is that it shortens the window during which debt can be collected. Previously, debt collectors were given six years to file a lawsuit to collect a debt, but that has now been cut in half to three years. Even payments made after that three-year period will not reactivate the debt in a way that allows the creditor to pursue legal action.
- Restrictions on threatening to sue: If your debt is time-barred, meaning that the three-year statute of limitations has run, then the creditor can’t threaten to sue you. Doing so is a violation of state and federal law.
- Informative legal filings: If a debt collector does file a lawsuit against you, then the initial filing must provide clear, detailed, and accurate information about the debt that is the subject of the claim. This, again, ensures that you have ample notice about the debt and can therefore act accordingly.
These consumer protections are huge. They help protect you not only from harassment, but also from sneaky tactics that creditors often use to try to collect on debts that you either don’t owe or that they no longer have the right to collect. So, if you’re dealing with a debt issue, make sure that you know the law and how it applies to your set of circumstances.
Considering bankruptcy as an option
We understand that most people want to put in the work necessary to pay off their debt. However, sometimes those efforts do nothing than lead to years of torment with little ground gained. If you want to avoid that outcome, then you might want to consider whether personal bankruptcy is right for you. This process may be able to provide you with true debt relief so that you can acquire the fresh financial start that you deserve.