Home Consumer debt Protect New Yorkers From Predatory Debt Collectors

Protect New Yorkers From Predatory Debt Collectors

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Every day, distressed New Yorkers learn their wages have been garnished and their bank accounts frozen. For too many people, this unsettling event is their first notice that a debt collection lawsuit has been filed against them and that a judgment exists against them.

Adding insult to injury, the alleged debt has now swelled to an unrecognizable amount. Why? Because in New York, creditors can enforce judgments for 20 years and can charge a shocking 9% interest rate on them.

Governor Kathy Hochul can easily correct this injustice by signing a bill that has already passed through both houses of the Legislative Assembly. We urge him to sign it without delay.

Who are New Yorkers affected by this? Potentially everyone. Consider the thousands of New Yorkers facing debt collection from former homeowners. Tenants are regularly forced to terminate leases prematurely due to unliveable conditions in their apartments, while others – some of whom were already paying half of their monthly income in rent – are forced to vacate their accommodation due to economic hardship. , exacerbated by the COVID-19 crisis.

Debt collection activity does not just target or disproportionately affect low-income New Yorkers and communities of color. This is based on the fact that many people faced with the enforcement of the judgment cannot afford a lawyer and do not have access to free legal representation. Judicial creditors who successfully enforce old judgments make a handsome profit off the backs of those who are least able to bear it.

In June, the legislature passed the Fair Consumer Judgment Interest Act (S5724A / A6474A), which was championed by Sen. Kevin Thomas, D-Levittown, and Assembly Member Helene Weinstein, D-Brooklyn. This bill would reduce the interest rate on consumer debt judgments from 9% to 2%, which more equitably aligns with market rates, which have averaged 1.8% over the course of the year. over the past 20 years. Backed by dozens of nonprofits, unions and clergy, the bill awaits Hochul’s signature, but time is running out. Passage of this bill is a critical issue of economic and racial justice. We urge the governor to sign it before the window closes.

Ron Kim is a civil rights lawyer and elected mayor of Saratoga Springs. Ray Brescia is Professor of Law at Albany Law School.


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