If you default on your debts, your creditors can sue you to recover the amount you owe as well as attorney's costs. However, creditors and debt collectors don't have the absolute right to sue -- they must follow state and federal laws and procedures. New York requires creditors to sue within a certain period of time and to send appropriate notices prior to filing a lawsuit.
Statute of Limitations
As of June 2011, New York has a statute of limitations of six years on consumer debts such as credit card debts. Thus, creditors must file their lawsuits within this period of time. Sometimes creditors will file a lawsuit after the statute of limitations expires; if a creditor does so, you or your attorney can object on these grounds and the court must throw out the lawsuit.
Notification Requirement
Debt collectors must notify you in writing within five days of first contacting you about a debt. The notice must inform you that this is an attempt to collect a debt, the name of the original creditor and the amount of the debt that you owe. It must also inform you that you have 30 days to dispute the debt. If the debt collector does not send you this notice and later sues you, New York allows you to challenge the lawsuit on the basis that you did not receive the proper notification of the debt.
Cease-And-Desist Letters
If you would prefer that debt collectors not contact you, you can write a cease and desist letter demanding that they stop. Send the letter via certified mail. Once the debt collector receives the letter, all attempts to contact you must stop, with the exception of giving you a summons in the evenut of a lawsuit.
Court Summons
The creditor or debt collector must provide a written summons to you if he files a lawsuit against you. The summons tells you the date and time of your court hearing. You need to attend the hearing; if you fail to appear in court, the creditor automatically wins the lawsuit and you may face wage garnishment or other serious collection activity.
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