On November 8, 2021, New York Governor Hochul signed into law the “Consumer Credit Fairness Act” (S.153).  The Act contains a series of amendments to the New York Civil Practice Law and Rules that significantly impact debt collection lawsuits filed in New York state courts by creditors or debt collectors.

The key amendments include:

• A 3-year statute of limitations for most collection lawsuits arising out of a consumer credit transaction
• A prohibition on revival or extension of the limitations period based on a subsequent payment, written or oral affirmation, or other activity on the debt
• When a collection action against a consumer arising out of a consumer credit transaction is filed, a specified notice must be submitted to the court by the plaintiff for the court to mail to the consumer
• Documentation/information requirements for a collection action arising out of a consumer credit transaction, which include:
  • The contract or other written instrument on which the lawsuit is based must be attached to the complaint (which for revolving accounts can be satisfied by the charge-off statement)
  • If the plaintiff is not the original creditor, the complaint must include the date of assignment or sale of the debt to the plaintiff, the name of each previous owner of the account and the date of assignment to that owner, and the amount due at the time of sale or assignment by the original creditor
• When summary judgment is sought in a collection action against a consumer arising out of a consumer credit transaction where the consumer is not represented by an attorney, a specified notice must be submitted to the court by the plaintiff for the court to mail to the consumer
• When a default judgment is sought in a collection action arising out of a consumer credit transaction by a plaintiff who is not the original creditor, the application for default judgment must include (1) an affidavit by the original creditor “of the facts constituting the debt, the default in payment, the sale or assignment of the debt, and the amount due at the time of sale or assignment,” (2) for each subsequent assignment, an affidavit of sale of the debt by the debt seller, and (3) an affidavit of a witness of the plaintiff which includes a chain of title of the debt

With the exception of the prohibition on revival or extension of the statute of limitations which becomes effective on February 5, 2022, the other amendments described above become effective on March 7, 2022.