Statute of Limitations on Debt in New York

Are you being hounded or harassed by debt collectors for an old debt you thought was written off years ago? If you answered yes, then it is likely that you are being contacted by a “scavenger debt collector.” These are companies that purchase older, mostly uncollectible debts for a small fraction of its value. These type of debt collectors are widely known to use unethical and illegal methods to collect time-barred debt.

You do not have to pay a debt that is considered too old by your state. This is what is called the statute of limitations on debt. It is a statute in a common law legal system that sets forth the maximum period of time, after the debtor becomes deliquent on the debt, that law suits based on those events may be begun.

There are four different kinds of agreements to which the statute of limitations can apply to:

  1. Oral Contract – This is kind of like a “handshake agreement.” An individual agrees to pay money loaned to them by someone, but there is no written contract. This type of agreement is legal, although it is the toughest to prove in court.
  2. Written Contract – An individual agrees to pay the loan under the terms in a written document, which is signed by both that person and their debtor.
  3. Promissory Note – This is like a written contract, but a big difference is that the scheduled payments and interest on the loan is described in the promissory note. An example of this is a mortgage.
  4. Open-ended Account – This is an account that has a varying, revolving balance. An example of this is a credit card.

Particularly, in the state of New York, the statute of limitations on all four of these agreements is 6 years. If a debt collector calls you about an old debt, do not immediately admit that you owe the debt and do not agree to make any payments. You can just tell them that the statute of limitations has run on this debt and do not contact you again. Do not agree to send any money to them, because if you do so, the statute of limitations might restart which gives them the legal right to sue you and seek a wage garnishment.

Archana Sabesan

Archana Sabesan

Archana Sabesan is a junior at North Carolina State University. She is currently pursuing a major in Psychology, with a primary focus in Child Psychology, and a minor in Spanish. After graduating, she plans to attend graduate school to obtain her PsyD degree in Clinical Psychology. Her experiences at Stanford University and Duke University as an Undergraduate Research Assistant have helped her to develop an effective research regiment and build on her observation skills. She hopes to open a private practice of her own in the future.

Every summer, Archana works at Kumon, a math and reading workshop, tutoring children between the ages of three and 18 in these subjects. She used to be enrolled in this program herself, so this allows her to connect with the students and give them the one-on-one help that they need. Archana is also currently a member of NC State’s Psychology Club, Rotaract Club, and EKTAA (NC State’s premiere South Asian Student Organization).

Archana was born in India, and moved to North Carolina with her immediate family when she was 7 years old. She speaks mostly Tamil, the native language of South India, and English in her home. In addition, having taken Spanish classes since 6th grade, she can speak and understand it pretty well too. Archana enjoys spending time with her family and friends, watching movies, listening to music, and going to the gym. She also loves to travel, and hopes to travel the world one day and learn about all the different cultures!
Archana Sabesan