Relates to actions arising out of consumer debt

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic13

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◆ The sponsor's argument

Why Andrew Gounardes says this is needed

New York law treats the collection of consumer debts differently, creat- ing confusion not only for consumers, but also courts and creditors. For example, New Yorkers holding debts arising from consumer credit trans- actions have protections under the Consumer Credit Fairness Act of 2021 that are unavailable to debtors holding other forms of common consumer debts. This legislation reduces confusion and enhances consumer protections by adding a definition of "consumer debt" that subsumes consumer credit transaction, and includes other types of debts such as medical debt, rent arrears, or tuition debt. As a result, more types of consumer obli- gations (including things like medical debt, rent arrears and other non-credit obligations incurred for personal, family, or household purposes) are covered by venue rules, pleading requirements, service safeguards, statutes of limitation, default judgment rules, and notice requirements. ,sk 1 The bill contains narrow exemptions in CPLR 105(f-1) for obligations secured by real property and for obligations to pay money when they are sought within a summary proceeding to recover possession of real property under Article 7 of the Real Property Actions and Proceedings Law. The Article 7 exemption is intended to avoid alter- ing eviction proceedings brought under Article 7 of the RPAPL. It does not eliminate protections for consumers who are sued for rent arrears in plenary debt collection actions brought outside of Article 7 proceedings, including in civil courts, supreme courts, justice courts, district courts, and city courts. ,sk 1 These exemptions also do not affect CPLR 5004, which was amended by the Fair Consumer Judgment Inter- est Rate Act in 2021 to lower the judgment interest rate on consumer debt from nine percent to two percent. CPLR 5004(b) contains a separate definition of "consumer debt" that applies for purposes of that section and controls over the general definition of "consumer debt" in CPLR 105(f-1) when determining whether a judgment is subject to the two percent consumer-debt judgment interest rate. Accordingly, the exemptions in CPLR 105(f-1) should not be read to narrow the scope of CPLR 5004. Consumers sued by hospitals, nursing homes, landlords, colleges, and other creditors face the same challenges and obstacles that exist in cases seeking to collect credit card debt; they should be given the same protections. Furthermore, clear and uniform standards help promote consistency across courts and provide predictability to businesses oper- ating in New York.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.