New York Debt Collection Litigation: Payment Can Extend the Life of the Debt


Remember the older debt that you couldn’t sue on because the time in which you could have brought legal action (the statute of limitations) had passed? For purposes of New York Debt Collection Litigation, payment can extend the life of the debt. If your customer made an on-account payment, you may have a chance to pursue New York debt collection litigation.

Partial payment, in most circumstances, will re-start the “limitations period”. When a partial payment is made without any specifications that it is a payment in full, it will generally revive that older debt. The partial payment restarts the limitations period from the date of that payment.

However, extending the “limitations period” is not automatic. The payment must be made under such circumstances that it can and will be deemed an acknowledgment of the entire debt or a portion thereof. For example, a client may specify that a payment applies only to a debt in the payment amount or that it is payment or settlement in full. In that situation, even if rights are reserved the payment does not revive a larger overall debt.

It is imperative that you keep good payment records on all accounts. You never know when a partial payment will save the day by saving the debt for collection. This may, in turn, allow you the option of pursuing New York  debt collection litigation.