Can You Include Interest in Default Judgments During the COVID-19 Shutdown?

gold gavel to represent default judgment interestNew York on PAUSE during the COVID-19 pandemic initially meant that other than emergency applications, no New York debt collection litigation cases could be filed. Creditors could not use the courts to collect monies owed to them.

When the courts re-opened, only cases filed pre-shutdown (before March 22, 2020) could proceed. New filings were permitted beginning May 2020, allowing creditors the ability to help get themselves paid. Unfortunately, because of extensions ordered by the state, default judgments on cases filed after March 22, 2020, could not be submitted until early November 2020, during which time many businesses closed, resulting in debtors without means to repay and creditors without recovery.

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Governor Cuomo’s November Executive Order Allows Debt Collection Litigation to Proceed

Photo of New York City to represent executive order and debt collectionCreditors and debtors alike have been holding their breath waiting to see what New York Governor Andrew Cuomo would do as it relates to civil actions in the state, more specifically debt collection litigation. On November 3, 2020, Governor Cuomo issued an executive order which basically gives litigants a green light to proceed with debt collection litigation.

Subsequent to declaring a state of emergency in New York in early March, Cuomo issued several other orders which affected debt collection in the state.

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How New York Budget Cuts Will Affect Debt Collection

Gavel to represent New York budget cuts affecting debt collection.Without aid from the federal government, New York state will see budget cuts of 10 billion in 2021 followed by budget cuts of 30 billion in 2022. Some of the anticipated cuts will affect our judicial system. The budget cuts will affect New York debt collection cases. Here’s how.

Governor Cuomo’s 2021 budget calls for a decrease in funding of the New York judiciary system. According to Chief Administrative Judge Lawrence Marks, “New York’s Unified Court System will see a $300 million cut to its annual budget of $3 billion, forcing the judiciary to “implement a range of painful measures.”

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Getting a Judgment in Your New York Debt Collection Case During the Pandemic

photo of a gavel to represent debt collection during the pandemic.Maybe you already started a New York debt collection case and are waiting for a judgment or are looking to file a new case.  With news of court closures, partial staffing, extensions, and a likelihood of an increased infection rate in New York, will you be able to get a judgment in your debt collection case during the pandemic?

Your concern is valid. Before New York was placed on pause due to the COVID-19 pandemic, New York courts already had delays in processing judgments. Budget cuts, the voluminous filings after the 2008 recession, and catching up on older court filings created a backlog for the clerks to reach and enter judgments.

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