Debt Collection Defense: Frequently Asked Questions

Request written verification of the debt within 30 days of their first contact. The collector must stop collection activity until they provide verification. Do not acknowledge the debt, make payments, or provide personal financial information until you have confirmed the debt is valid and within the statute of limitations.

Source: FDCPA, 15 U.S.C. § 1692g

6 years for most consumer debts, including credit cards, personal loans, and medical bills. The clock starts from the date of last payment or last activity. If the statute has expired, the debt is time-barred and the collector cannot sue you. Making any payment resets the clock.

Source: N.Y. CPLR § 213(2)

Only with a court judgment. Even then, New York limits garnishment to 10% of gross wages or the amount by which weekly disposable earnings exceed 30 times the minimum wage, whichever is less. Certain income (Social Security, disability, unemployment, public assistance) is fully exempt from garnishment.

Source: N.Y. CPLR § 5231; 15 U.S.C. § 1673

Collectors cannot call before 8 AM or after 9 PM, use threats or profanity, misrepresent the amount owed, contact your employer (except to verify address), or continue collection after you dispute in writing. Violations entitle you to statutory damages of up to $1,000 per lawsuit plus actual damages and attorney fees.

Source: FDCPA, 15 U.S.C. §§ 1692c-1692f

They can file a lawsuit, but if the 6-year statute of limitations has expired, you have an affirmative defense. You must raise this defense in your answer or you waive it. Many debt buyers sue on time-barred debts hoping consumers will not respond. Always answer a summons, even for old debts.

Source: N.Y. CPLR § 213(2)

A default judgment is entered when you fail to respond to a lawsuit within the required time. To vacate it, file a motion showing a reasonable excuse for the default and a meritorious defense to the claim. Common excuses include improper service (sewer service), medical emergency, or military deployment. Move quickly: courts favor prompt action.

Source: N.Y. CPLR § 5015

Sewer service is when a process server falsely claims to have served legal papers on you. It is illegal and common in debt collection cases. If you discover a default judgment from a lawsuit you never received, file a motion to vacate based on lack of proper service. Request the affidavit of service and compare it to your actual whereabouts.

Source: N.Y. CPLR §§ 308, 5015

Only with a court judgment and a restraining notice or execution served on your bank. However, New York law exempts the first $3,600 in any bank account from restraint if it contains direct-deposited exempt income. Banks must provide you with exemption claim forms and release exempt funds within specific timeframes.

Source: N.Y. CPLR § 5222-a; Exempt Income Protection Act

File a dispute with each credit bureau (Equifax, Experian, TransUnion) identifying the inaccurate information. The bureau has 30 days to investigate and respond. If the debt cannot be verified, it must be removed. You can dispute online, by mail, or by phone, but written disputes create a paper trail.

Source: Fair Credit Reporting Act, 15 U.S.C. § 1681i

A written request sent to a debt collector within 30 days of their initial contact demanding proof that you owe the debt, the amount is correct, and they have the right to collect it. The collector must provide the name of the original creditor, the amount owed, and verification. If they cannot validate, they must stop collection.

Source: FDCPA, 15 U.S.C. § 1692g

No. Debtor's prison was abolished in the United States. You cannot be jailed for failing to pay consumer debts. However, you can be held in contempt for ignoring a court order related to a judgment, such as failing to appear for a debtor's examination. Always respond to court orders.

The court enters a default judgment against you, giving the collector the right to garnish wages, freeze bank accounts, and place liens on property. Default judgments accrue 9% annual interest in New York. Responding to the lawsuit, even without a lawyer, prevents default and preserves your defenses.

Source: N.Y. CPLR § 5004 (9% interest)

A charge-off is an accounting designation, not forgiveness. The original creditor writes the debt off its books but can still collect or sell it to a debt buyer. The statute of limitations still applies. A charge-off does not restart the limitations period or create a new obligation.

Very limited. A collector can contact third parties only once, only to obtain your location information, and cannot reveal that you owe a debt. They cannot contact your employer except to verify your address. New York's debt collection regulations add further restrictions beyond federal law.

Source: FDCPA, 15 U.S.C. § 1692c; N.Y. Gen. Bus. Law s 601

If your only income is from exempt sources (Social Security, SSI, public assistance, unemployment) and you own no non-exempt assets, you are considered judgment-proof. A creditor can obtain a judgment but cannot practically collect on it. This status can change if your financial situation improves.

Source: N.Y. CPLR § 5205 (exempt property)

Yes, typically after 60-180 days of non-payment. Medical debt in collections under $500 can no longer appear on credit reports under recent credit bureau policy changes. New York's Surprise Bill Law protects against balance billing from out-of-network emergency providers. Always request an itemized bill and dispute any billing errors.

Source: N.Y. Financial Services Law § 606 (Surprise Bill Law)