New York Debt Defense Attorney

Know Your Rights | Procedural Defenses and Counterclaims

Good counsel in core areas of debt-defense law go a long way. Raising procedural rights and evidentiary objections are key strategies on our legal defense.

New York Consumer Credit Fairness Act (CCFA): A Quick Guide

The New York Consumer Credit Fairness Act (CCFA), enacted on November 8, 2021, introduces substantial modifications to the state's Civil Practice Law and Rules (CPLR). The key changes include:

1. Shortened Statute of Limitations: The time frame to sue has been reduced from six years to three, effective from April 7, 2022. Any later payments or affirmations won't revive or extend this period.

2. Enhanced Complaint Evidence: From May 7, 2022, complaints must come with the underlying contract or charge-off statement and additional account-specific details, such as the original creditor's name, account balances, and history.

3. Stricter Requirements for Debt Buyers: To obtain default judgments, debt buyers need to provide specific affidavits detailing the debt's history and sale.

4. Mandatory Additional Notice: Creditors must send an additional notice detailing the consequences of not responding to a lawsuit and available defense resources.

5. Forms and Templates: The CCFA offers specific forms and resources for consumer credit cases. It builds upon earlier reforms from 2014, which were extended by the CCFA to cover all consumer debt cases. Moreover, as of December 31, 2021, the interest rate on consumer debt judgments against individuals was reduced from 9% to 2%.

6. Interest Rate on Judgments: From April 30, 2022, consumer debt judgments against individuals bear a 2% annual interest rate. Other judgments, including those against non-individual entities, continue at 9%.

7. Regulatory Complaints: Consumers can leverage regulatory bodies like the Bureau of Consumer Frauds and Protection or the Consumer Financial Protection Bureau for cases of deception or unfair treatment.

For assistance or clarification regarding this law, consumers are advised to seek professional help.

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"Substantiation" of Consumer Debts

In New York, debt collectors are subject to stringent guidelines when it comes to verifying the legitimacy of charged-off debts they're pursuing. As outlined in the N.Y. Comp. Codes R. & Regs. Tit. 23 § 1.4 - Substantiation of consumer debts, if a consumer challenges the validity of a debt or the collector's right to pursue it, the debt collector must provide comprehensive evidence supporting the debt's authenticity and their right to collect it. This regulation ensures transparency and fair treatment in debt collection practices, safeguarding consumers from unjust claims.

Dispute by the Consumer:

If a consumer disputes a charged-off debt:

• The debt collector must inform the consumer of their right to request debt substantiation.
• The dispute can be treated as a request for substantiation.

For an oral dispute:

• The collector should inform the consumer during the conversation on how to request debt substantiation in writing.
• Must provide written instructions to the consumer within 14 days.

For a written dispute:

• Collector must provide written instructions on substantiation request within 21 days.

Providing Substantiation:

• The debt collector has 60 days to provide written proof of the charged-off debt upon request.
• Collection activities must halt until written proof has been provided.
• Debt collectors only need to substantiate the debt once while they have ownership or collection rights.

Substantiation Components:

• The signed contract/application or, if absent, a document provided to the debtor during the account's active phase proving the debt's inception.
• For revolving credit, the most recent statement recording any transaction is sufficient.
• The charge-off statement or an equivalent document from the original creditor.
• A complete chain of title description from the original to the present creditor, with details of each assignment, sale, and transfer.
• Records of any prior settlement agreement related to the debt.

Documentation Retention by Debt Collector:

• If a consumer requests debt substantiation:
  • The debt collector must retain evidence of the request.
  • The debt collector must also retain all provided documents in response until the debt's status changes (discharged, sold, or transferred).

50 Common Ways that Collectors Violate the FDCPA

1. Threatening or filing a lawsuit on a time-barred debt (a debt that is too old).
2. Misrepresenting the collector's legal rights, such as communicating with third parties or executing a judgment without court approval.
3. Continuing collection efforts on a claim the collector knows is not valid.
4. Misrepresenting the urgency or imminence of a collection lawsuit.
5. Threatening legal action without actually having ownership or assignment of the debt.
6. Misrepresenting the creditor's authority to sue.
7. Attaching self-created account statements to a collection complaint, falsely presenting them as originating from the creditor.
8. Falsely threatening to report the debt to third parties, like the consumer's employer or credit reporting agency.
9. Misrepresenting credit repair issues related to credit scores, late payments, and old accounts.
10. Misrepresenting the expiration of the right to dispute a debt.
11. Demanding full payment on an installment contract without an acceleration clause.
12. Using false or fictitious names.
13. Creating a false sense of urgency for a response.
14. Misrepresenting that the collector is the only one authorized to accept full payment.
15. Falsely implying that the collector is providing legal advice to the creditor.
16. Threatening legal action that amounts to the unauthorized practice of law.
17. Contradicting or confusing the consumer's debt-verification rights.
18. Compelling payment through Western Union or overnight mail.
19. Falsely implying a connection to the Internal Revenue Service (IRS).
20. Deterring the consumer from answering a complaint or seeking legal advice.
21. Misrepresenting the number and types of collection agency employees.
22. Misrepresenting the consumer's obligations by threatening to collect fees or charges not owed.
23. Engaging in unlicensed debt collection (search for New York City here).
24. Knowingly engaging in or profiting from sewer service.
25. Implying or using documents that falsely imply a default judgment was entered.
26. Misrepresenting the identity of the creditor or whom to pay.
27. Filing a collection lawsuit outside the statute of limitations.
28. Bringing a lawsuit without intending to meet the burden of proof.
29. Falsely attesting to personal knowledge of a creditor's business records.
30. Pursuing a collection lawsuit or selling the alleged debt knowing the wrong party was targeted.
31. Suing on a debt that has been discharged in bankruptcy.
32. Seeking pre-judgment interest not allowed under state law.
33. Filing two lawsuits for the same debt.
34. Taking action on a breached settlement agreement without sending a required notice to cure.
35. Falsely implying a previous award of attorneys' fees.
36. Seeking the collection of debt covered by third parties, like Worker's Compensation for medical debt.
37. Contacting a consumer who is represented by an attorney.
38. Sending a verification response directly to a consumer when verification was demanded by the consumer's attorney.
39. Threatening a collection lawsuit when not intended or as imminent as represented.
40. Threatening a collection lawsuit beyond the collector's contractual authority.
41. Threatening a collection lawsuit before verification or before a consumer's statutory or contractual period to cure delinquency.
42. Threatening a garnishment without a judgment or court order.
43. Enforcing a judgment that has already been vacated.
44. Stating or implying that a consumer lacks a legal defense to a collection lawsuit.
45. Stating or implying that a collection lawsuit has been filed when it hasn't.
46. Stating or implying that a judgment has been entered when it hasn't.
47. Adding unauthorized charges or judgment costs without a judgment.
48. Falsely threatening referral to an attorney.
49. Misrepresenting rights under the Fair Debt Collection Practices Act.
50. Making false threats of "investigations" into the consumer's "assets."

If you suspect any of the above violations, especially if you've been bothered by a collector on this list, please contact us immediately.

Debt Defense Lawyer in New York

The Langel Firm uses its intense study of city, state and federal laws to protect you against debt-collection lawsuits. We would be honored to utilize our debt-defense expertise to your advantage.

Click the below graphic to learn about 50 things debt collectors may not do.