Payday Loans Are Illegal in New York State

Pile of dollar bills to represent payday loans in New York.When money is tight, some seek out the last resort: a payday loan. These short-term, high-interest cash loans are offered in advance of a paycheck or some other form of cash injection. But the typically massive interest quickly adds up. Critics call these loans predatory and warn that borrowers can fall into even greater debt. That’s why New York made payday loans illegal. Lenders are not allowed to offer payday loans in-person, by telephone, or over the internet. The law also says it’s illegal for debt collectors to collect — or even to attempt to collect — on payday loans in New York state.

A recent blog post by the Federal Trade Commission found some payday lenders act dishonestly. The FTC found that unscrupulous lenders said borrowers would repay their loans with a fixed number of payments, but would dishonestly take more money from a borrower’s bank account.

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New York Courts to Reopen on Monday for New Filings

Photo of a gavel to represent New York courts reopen.

New York courts closed on March 16 as the coronavirus spread. During that time, the courts suspended “non-essential” cases, including debt collection matters. Now that infection numbers are falling and restrictions beginning to lift, New York courts are starting to reopen and restore their services. Courts across the state are set to allow electronic submissions of non-essential cases starting May 25.

In a memorandum to all trial court justices and judges sent on May 20, chief administrative judge Lawrence K. Marks said New York courts are now accepting non-essential cases through its electronic filing system, known as NYSCEF.

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What Happens If You Can’t Pay Your Commercial Lease in NYC Due to COVID-19

photo of new york city to represent commercial lease during COVID-19As the COVID-19 infection rate in New York decreases, the focus has turned to reopening the state and returning to work. The “New York State on PAUSE” executive order went into effect on March 22, 2020, closing all non-essential businesses statewide. While necessary from a public health perspective, the effect of the COVID-19 pandemic on many small businesses in New York City has been catastrophic, and affected their ability to pay their commercial lease.

Many New York City commercial tenants are now in a dire situation, having brought in no income since the executive order was implemented. A major concern is how commercial landlords will approach their tenants as monthly rent comes due. Another concern is the liability of personal guarantors of the commercial leases who assumedly are just as affected by the COVID-19 pandemic as the company they guaranteed.

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