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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New York Vacating 29,617 Northern Leasing Default Judgments

Image of a credit card processor to represent Northern Leasing vacating judgmentsA recent decision by the NY attorney general resulted in New York vacating 29,617 default judgments obtained by Northern Leasing. New York’s four-year crusade against Northern Leasing, a deceptive company, and its collection attorneys ends with a victory for business owners affected by their practices. The victory may be bittersweet however, as many of the affected businesses went under due to improperly entered judgments and the results that followed when the judgment creditor executed against the businesses’ assets.

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Can a NY Judgment Creditor Garnish PPP or Other CARES Act Funds?

Image of money on top of an envelope to represent garnishing PPPWith both consumers and small businesses receiving funds from the Paycheck Protection Program (PPP)  and CARES Act, questions have come up as to whether these amounts can be frozen or garnished by debt collectors or creditors. Is garnishing PPP or CARES Act funds an option for satisfying outstanding monies owed to judgment creditors?

Although New York has liberal laws on judgment enforcement, CPLR Sect 5222-a provides a laundry list of funds exempt from creditors’ reach. For commercial judgment debtors, although an unintended consequence, an exemption of $2,850 is applied.

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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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