One of the ways in which creditors and debt buyers may eventually attempt to collect money owed is by suing debtors. While litigation can prove effective, it often requires a significant commitment of time, organization, attorney fees, and other resources that these lenders or debt owners would prefer to avoid—so it’s common for them to put off filing a claim until it’s a last resort.

The law, meanwhile, protects borrowers in a number of ways, such as by regulating collection practices (outlawing harassment and other abusive tactics, etc.) and by setting a limited time frame in which creditors and collectors may take legal action. This time frame is known as the statute of limitations.

How long does a creditor have to sue?

According to New York’s Civil Practice Law and Rules (CPLR) section 213 and understanding that most debts are considered “a contractual obligation or liability,” creditors have six years in which to file a collection lawsuit against a debtor. The statute of limitations begins on the date of default, or the date on which payments became delinquent (typically about one month from the time the last payment was made).

It’s important to note if a debtor makes any payment after a period of delinquency, the result would be the statute of limitations starting fresh, thereby extending the time in which the creditor can file a lawsuit. In fact, trying to convince a debtor to make some sort of partial payment is a common tactic collectors will use to restart the statute of limitations after it has already expired.

Exceptions to New York’s statute of limitations

While six years is the statute of limitations for general consumer debt collection in New York, state law does specify a few exceptions for other categories of debt, including the following:

• Store credit card (i.e., a Target credit card, Macy’s credit card, Best Buy card, etc.) debt has a statute of limitations of four years
• Credit contracts from lenders located outside New York which specify statutes of limitations other than the standard six years are bound to whichever of the two is shorter
• Real property and mortgage debt have a statute of limitations of 10 years

When there are questions about debt-related legal claims, it’s important to consult a Bronx bankruptcy lawyer who can determine the validity of the case in regards to the statute of limitations.

Seek legal support from a financial law attorney in the Bronx

For more than 30 years, Thomas M. Denaro, Esq. has represented clients fighting debt collection litigation. To learn more about your rights or to schedule a consultation, contact the law firm online or call (718) 863-6000 today.