New York Makes Major Changes To Some Debt Collection Rules

Many people in the Empire State have been saddled with debt over the last few years as the pandemic dragged on. Thanks to some changes that the state government has made, many people may see additional options in dealing with those bills.

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During her 2022 New York State of the State Address, Governor Kathy Hochul stated her desire to make changes to laws in New York to help residents and consumers better deal with their financial situations. A recent law that the New York Legislature passed enacts part of that request from the Governor.

No one should face the threat of losing their home or falling into further debt after seeking medical care... I'm proud to sign legislation today that will end this harmful and predatory collection practice to help protect New Yorkers from these unfair penalties. With medical debt a burden for far too many, this is an important step to address this crucial issue.
-Kathy Hochul, Governor of New York

New York State Assembly Bill A.7363A / Senate Bill S.6522A changes the state civil practice law that controls how medical bills and debt can be collected by hospitals, clinics, and doctors in New York.

Under the new law, those who attempt to collect past-due medical debt can no longer place a lien on the primary home or property that is owned by someone who owes unpaid bills. The new law also prohibits collectors from garnishing the wages of those same people.

State collection records show that more than 50,000 people have been sued for medical debt in New York over the last 5 years, and many of those people were subject to having their wages garnished or homes foreclosed against.

These changes should help thousands of people in New York who have fallen behind on their bills not lose everything.