Collecting an Unpaid Debt in New York

New York debt collection requires street smart, a proactive game plan and the assistance, often, a debt collection lawyer in New York.  The following is the NY basic debt collection legal jargon that you should know.


A creditor is a person or entity to whom money is owed.  Normally, a creditor gives something of value to a borrower (money or services) in exchange for a promise that the borrower will pay them back.  In most cases, repayment is accompanied by an additional payment of interest.  Examples of creditors include credit card companies, banks, or any other person or company that lends money.  However, other businesses, such as medical professionals, lawyers and accountants are creditors when they provide services in exchange for a promise to pay.

A secured debt is a debt or loan that is guaranteed by collateral.  Collateral is an item of value that the creditor takes as payment if the debt is unpaid.  Prime examples of secured debts are mortgages, which are secured by real property and car loans.

An unsecured debt is backed by a promise to pay at a later date, and is not guaranteed by any collateral.  Prime examples of unsecured debt are unsecured credit cards and medical bills.

If you have a debt in New York that is unpaid, the best way to address it is to turn it over to a collection agency, who will attempt to collect what is owed.  New York creditors may also sell your debt to another company.  In New York, buying and selling of debts is legal.  There are companies in New York that specialize in buying and collecting on old debts.  These companies stand in place of the original New York creditor and must report debts accurately and treat borrowers fairly.

If a debt remains unpaid, creditors may also choose to sue for the remainder owed.  In New York, the statute of limitation for filing a debt collection lawsuit is six years from the date of default.  The date of default is approximately one month after the last payment was posted.  But, in matters concerning credit card debts, the statute of limitations may be as short as three years from the date of default.

If the creditor receives a judgment, the statute of limitations for collecting the judgment is twenty years.

If your New York business has debts that remain unpaid, it is important, often, to consult an attorney in New York, who will help you determine the best avenue to take to collect on your debt.

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