What Are Your Options for NY Debt Collection

Photo of different color doors to represent options for debt collection litigation.The route your debt collection case takes depends upon the nature of the debt, your underlying agreement with the client, their financial situation, and which NY debt collection options you’re open to. Factors that can impact your decision include the amount owed, the non-paying customer’s location, the underlying agreement between the parties, the customer’s financial situation, and the creditor’s attitude towards litigation.

Below are the debt collection options available in New York.


Your first option is to place the claim for demand. The demand stage typically includes sending a written demand for payment to the customer. The demand may be sent by regular or certified mail, or, for commercial claims, by email, text, or fax.

Demands generally also include phone calls, which helps increase the likelihood of payment without the necessity of going “legal.” A non-paying customer who receives a demand from an attorney will often infer that if they fail to make arrangements to settle, litigation would be next.


Selecting mediation usually comes about in one of three ways:

  1. The underlying agreement may provide for mediation in the event of a fee dispute,
  2. The parties can agree to seek mediation to resolve their dispute, or
  3. The court could order mediation.

Regardless of how you arrive at mediation, the process is the same. All parties must agree to mediate.
The parties meet with a neutral party, the mediator, with the goal of resolution. Generally, the cost is shared by all. Although you don’t need to complete the mediation process or necessarily agree to the terms, the mediator’s assistance in bringing the claim to resolution (or settlement) is usually close to that of what a Judge might order if the case went to litigation.


Similar to mediation, agreeing to arbitrate usually comes about in one of three ways:

  1. The underlying agreement may provide for arbitration in the event of a fee dispute,
  2. The parties can agree to arbitrate their dispute as an alternative to litigation, or
  3. The court could order arbitration.

Regardless of how you arrive at arbitration, the process is the same. You can choose one or a panel of three arbitrators. There is expedited discovery, an exchange of documents on an expedited schedule. A hearing is held and the rules of evidence are more relaxed than at a formal trial. The arbitrator’s decision, called an award, needs to be confirmed in state court.


If you do not have an agreement or if the agreement does not specifically provide for arbitration or mediation, litigation would be the next step in “legal.” Which state and court you litigate in depends on the location of the parties, the jurisdiction of the court, and more.

Alternative Tribunals

Many religious organizations and industry groups have tribunals who hear debt collection disputes. Some creditors may choose these for a variety of reasons. Similar to Beth Din, the Presbyterian church and others have programs for dispute resolution.

If you have a non-paying customer and are interested in learning more about your options, contact FFGN for a free consultation.