Debt Collection Laws in New York
If you're dealing with debt collection in New York, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.
New York's 2026 debt outlook
Bankruptcy filings in New York ran 23,492 in the 12 months ending March 2026, versus 21,776 the year before (+7.9%), per official U.S. Courts data. See the full 51-state filing ranking.
Serious mortgage delinquency (90+ days late) in New York sits at 0.9%, trending toward roughly 1% by the end of 2026 (drifting up). See the full 51-state outlook and methodology.
Debt collection complaints to the CFPB from New York residents ran 6,839 so far in 2026, versus 5,852 over the same window in 2025 (+17%). See the full state-by-state surge ranking.
How much of my paycheck can be garnished in New York?
New York caps wage garnishment on an ordinary money judgment at the lesser of 10% of your gross income or 25% of your disposable earnings, and it only reaches earnings above 30 times the applicable minimum hourly wage — federal or New York state, whichever is higher — under CPLR §§ 5231 and 5241. Below that floor, nothing at all can be withheld for consumer debt.
New York's 10%-of-gross cap is noticeably stricter than the federal default of 25% of disposable earnings. Most people in New York will find that 10%-of-gross figure ends up being the smaller, controlling number — gross income is a bigger base to work from, but the percentage taken from it is a lot lower.
Child support and spousal maintenance run on a separate, much higher withholding schedule (CPLR § 5241, up to 50-65% depending on arrears and other obligations) and aren't limited by the consumer-debt cap described here.
Tier: Meaningfully stricter than the federal formula — see the full 20-state ranking.
Can a creditor take money from my bank account in New York?
New York automatically protects up to $3,425 in your bank account if it traces back to exempt income received electronically in the prior 45 days — Social Security, SSI, public assistance, unemployment, disability, child or spousal support, pensions, or veterans' benefits — under CPLR § 5205(l). Your bank has to serve you a specific exemption-claim notice when a restraining notice hits your account.
This is a single, inflation-indexed protection rather than two separate dollar amounts: CPLR § 5205(l) itself sets the exempt-income figure, and the NY Department of Financial Services periodically adjusts it — the current $3,425 figure took effect April 1, 2024, with the next scheduled adjustment set for April 1, 2027. CPLR § 5222-a works alongside it as a procedural rule, not a separate dollar exemption — it's what requires the bank and the sheriff to serve you a specific written notice explaining how to claim the exemption once a restraining notice or levy hits your account.
Is my home protected from creditors in New York?
How much home equity New York protects depends on which county you're in, under CPLR § 5206 — $204,825 if you're in one of New York City's five boroughs, or in Nassau, Suffolk, Rockland, Westchester, or Putnam County; $170,700 across several Hudson Valley and Capital Region counties; and $102,400 everywhere else.
These figures aren't the flat $150,000/$125,000/$75,000 numbers printed directly in the statute — like the bank-account exemption above, they're periodically adjusted by the NY Department of Financial Services. The current figures took effect April 1, 2024, with the next scheduled adjustment set for April 1, 2027, so check the DFS exemption table directly if you're relying on the number closer to that date.
How long can a debt collector sue me in New York?
New York shortened how long a creditor has to sue you over consumer debt — credit cards, medical bills, and similar consumer credit — from 6 years down to 3, effective April 7, 2022, under the Consumer Credit Fairness Act (CPLR § 214-i). Non-consumer written contracts are still on the general 6-year rule under CPLR § 213.
| Debt type | Statute of limitations |
|---|---|
| Consumer credit debt (credit card, medical, etc.) | 3 years |
| General written contract (non-consumer) | 6 years |
Here's a protection worth knowing: the Consumer Credit Fairness Act also added a non-revival rule, meaning a payment or acknowledgment on a time-barred consumer debt won't restart that 3-year clock. The law also blocks contracts from importing a longer out-of-state limitations period through a choice-of-law clause.
See how New York's 3 years deadline compares to all 20 states.
Does New York have its own debt collection law beyond the federal FDCPA?
New York General Business Law § 601 bars tactics like impersonating law enforcement, collecting fees you never agreed to, or faking legal process — and unlike the federal FDCPA, it applies to original creditors, not just third-party collectors. If you're in New York City specifically, there's another layer: the Department of Consumer and Worker Protection requires its own Debt Collection Agency License, with rules stricter than federal law even for out-of-state collectors reaching NYC residents.
One gap worth knowing: NYC's licensing rules don't carry over the federal FDCPA's exclusion for debt that wasn't already in default when a servicer took it over. That means some communications that would be exempt under federal law can still trigger NYC-specific obligations.
Where can I find free or low-cost legal help in New York?
If you're dealing with a debt lawsuit, garnishment, or collector dispute in New York, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.