Can you be sued on an old consumer debt in New York?

This page explains New York law for people sued on credit card balances, personal loans and other consumer debts, plus the federal debt collection rule on time-barred debts. KOR Law LLP's consumer protection practice represents consumers in disputes with credit card companies and debt collectors, including claims against improper debt collection conduct. Some consumer debt lawsuits are brought by companies that bought the account from the original lender, which is why New York requires plaintiffs to plead the account's age and ownership in detail.

How long does a creditor have to sue?

"An action arising out of a consumer credit transaction where a purchaser, borrower or debtor is a defendant must be commenced within three years," except as provided for residential rent claims, sales of goods under the UCC, and certain other statutes (CPLR 214-i). The statute adds that "when the applicable limitations period expires, any subsequent payment toward, written or oral affirmation of or other activity on the debt does not revive or extend the limitations period."

The court system's CourtHelp guidance explains that the Consumer Credit Fairness Act created this three-year limit as of April 7, 2022, and that, as of that date, payments after the period expires do not extend it for most types of consumer debts. For any debt, the dates of the last payment, the charge-off and the filing should be checked carefully.

What must the creditor's complaint show?

New York requires detailed pleading in consumer credit cases. The contract, or for a revolving credit account the charge-off statement, must be attached, and the complaint must state (CPLR 3016(j)):

• the original creditor's name and the last four digits of the account number;
• the date and amount of the last payment, or that no payment was made;
• an itemization of the amount sought, which for a revolving account means the balance at charge-off, and the interest, other charges, and payments or credits since charge-off;
• the balance on the most recent statement recording a purchase, payment or balance transfer; and
• whether the plaintiff is the original creditor and, if not, the date the debt was sold or assigned, each prior owner with the dates of each assignment, and the amount due when the original creditor sold it.

These details often reveal the age of the debt and gaps in the chain of ownership. CourtHelp lists lack of standing as a defense: a buyer of a debt "must prove to the court that it owns your debt," usually through the assignment documents.

What should you do when you are served, step by step?

1. Note the date and method of service. You must appear within 20 days of personal service, or 30 days after service is complete for other methods (CPLR 320(a)).
2. Read the complaint against CPLR 3016(j). Check the last payment date, the charge-off balance, the itemization and the ownership chain.
3. Calculate the three years. Compare the filing date with when the claim arose (CPLR 214-i).
4. Answer and raise every defense. The statute of limitations defense is waived if it is not raised by motion or in the answer (CPLR 3211(e)). CourtHelp lists other common defenses, including disputing the amount, lack of standing, bankruptcy discharge, identity theft, and being only an authorized user of a card.
5. Consider a motion to dismiss. A claim barred by the statute of limitations is a ground for dismissal (CPLR 3211(a)(5)).
6. Keep records of all collection contacts. Suing or threatening to sue on a time-barred debt may violate federal rules for debt collectors (12 CFR 1006.26(b)); see what a debt collector can legally do in New York.

What if you already have a default judgment?

Many people learn of a debt lawsuit only when their bank account is frozen. New York builds in safeguards before a default: the plaintiff must mail a copy of the summons to a defendant's residence in a plain "personal and confidential" envelope at least 20 days before a default judgment against a natural person on a contract debt (CPLR 3215(g)(3)), and a clerk's default requires an affidavit that, after reasonable inquiry, the plaintiff believes the limitations period has not expired (CPLR 3215(j)). Defenses can also be raised on a motion to vacate the default, as CourtHelp notes; the standards are in whether you can undo a default judgment in New York. If a bank account was restrained, see what you can do when your bank account is frozen by a restraining notice.

What changes the answer?

• The type of debt. CPLR 214-i covers consumer credit transactions, with exceptions for residential rent and UCC sales of goods.
• The dates. When the claim arose and when the suit was filed decide timeliness (CPLR 214-i).
• Whether you raise the defense. It is waived if not asserted (CPLR 3211(e)).
• Who is suing. A debt buyer must show ownership (CPLR 3016(j)(7); CourtHelp).
• Bankruptcy, identity theft or authorized-user status can defeat the claim entirely (CourtHelp).
• The interest claimed. Judgments in consumer debt actions against individuals carry 2%, not the general 9% (CPLR 5004(a)).

For example: a four-year-old credit card balance

Common mistakes

• Ignoring the summons. The statute of limitations protects only those who raise it.
• Paying on a time-barred debt to "make it go away." It does not revive the claim under CPLR 214-i, but it also does not end a lawsuit.
• Leaving defenses out of the answer. Unraised limitations defenses are waived (CPLR 3211(e)).
• Not checking the itemization. Interest, fees and credits must be broken down (CPLR 3016(j)(5)).
• Assuming the plaintiff owns the debt. Ownership must be shown (CourtHelp).
• Ignoring credit reporting. Old collection accounts have reporting limits; see whether New York has its own credit reporting law.

What to do this week

1. Write down the date and method of service and calculate your answer deadline.
2. Find your last statement and the date of your last payment.
3. Compare the complaint with CPLR 3016(j) and note what is missing.
4. Prepare an answer that raises the statute of limitations and every other defense.
5. Save all letters and call records from collectors.
6. Speak with counsel about a motion to dismiss and any claim against the collector.

Frequently asked questions

Does the three-year rule erase the debt?

It bars a lawsuit to collect it if raised as a defense. Federal rules also forbid debt collectors from suing or threatening to sue on time-barred debts (12 CFR 1006.26(b)).

What interest can be added to a judgment on consumer debt?

Two percent a year in an action arising out of a consumer debt where a natural person is the defendant (CPLR 5004(a)), compared with the general 9% rate.

Can I sue the collector for suing me on an old debt?

Possibly, under the federal debt collection rules, within one year of the violation. See what you can recover for a credit reporting or debt collection violation.

What if I never received the lawsuit?

Improper service can be a basis for vacating a default; see the default judgment page linked above. CourtHelp notes that defenses can be raised in a motion to vacate.

Is medical debt treated the same way?

Medical debt has its own rule: an action on a medical debt by a licensed hospital or health care professional must be started within three years of treatment (CPLR 213-d). New York also bars credit bureaus from reporting medical debt (GBL 380-j(a)(3)).

If a judgment is entered, what can the creditor take?

A judgment creditor can use restraining notices and income executions, but New York protects many kinds of income and a minimum bank balance. The protections are explained in what property a New York judgment creditor cannot take.

How long do I have to sue a collector?

Usually one year under the FDCPA; see how long you have to sue under the FCRA, FDCPA, or TCPA.