Debt Collection Laws in New York
If you're dealing with debt collection in New York, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.
How much of my paycheck can be garnished in New York?
New York caps wage garnishment on an ordinary money judgment at the lesser of 10% of your gross income or 25% of your disposable earnings, and it only reaches earnings above 30 times the applicable minimum hourly wage — federal or New York state, whichever is higher — under CPLR §§ 5231 and 5241. Below that floor, nothing at all can be withheld for consumer debt.
New York's 10%-of-gross cap is noticeably stricter than the federal default of 25% of disposable earnings. Most people in New York will find that 10%-of-gross figure ends up being the smaller, controlling number — gross income is a bigger base to work from, but the percentage taken from it is a lot lower.
Child support and spousal maintenance run on a separate, much higher withholding schedule (CPLR § 5241, up to 50-65% depending on arrears and other obligations) and aren't limited by the consumer-debt cap described here.
Tier: Meaningfully stricter than the federal formula — see the full 20-state ranking.
Can a creditor take money from my bank account in New York?
New York automatically protects up to $2,500 in your bank account if it traces back to exempt income you received electronically in the prior 45 days — Social Security, SSI, public assistance, unemployment, disability, child or spousal support, pensions, or veterans' benefits — plus a separate general judgment exemption currently set at $3,425. Your bank has to serve you a specific exemption-claim notice when a restraining notice hits your account.
These two protections work differently, and it's worth knowing which one applies to you: the $2,500 exempt-income protection (CPLR § 5222-a) is about where the money came from, while the $3,425 general exemption (CPLR § 5205(l)) applies no matter the source. Both figures get periodically adjusted by the NY Department of Financial Services — the $3,425 number took effect April 1, 2024, with the next scheduled adjustment set for April 1, 2027.
Is my home protected from creditors in New York?
How much home equity New York protects depends on which county you're in, under CPLR § 5206 — $150,000 if you're in one of New York City's five boroughs, or in Nassau, Suffolk, Rockland, Westchester, or Putnam County; $125,000 across several Hudson Valley and Capital Region counties; and $75,000 everywhere else.
These figures were last set in 2020 and are supposed to get indexed roughly every 3 years by statute. Several bills to raise the tiers — up to $250,000 for the top bracket — were pending in the 2025-2026 legislative session but hadn't been confirmed signed into law as of this writing. Worth checking the current status rather than assuming these numbers are still the ceiling.
How long can a debt collector sue me in New York?
New York shortened how long a creditor has to sue you over consumer debt — credit cards, medical bills, and similar consumer credit — from 6 years down to 3, effective April 7, 2022, under the Consumer Credit Fairness Act (CPLR § 214-i). Non-consumer written contracts are still on the general 6-year rule under CPLR § 213.
| Debt type | Statute of limitations |
|---|---|
| Consumer credit debt (credit card, medical, etc.) | 3 years |
| General written contract (non-consumer) | 6 years |
Here's a protection worth knowing: the Consumer Credit Fairness Act also added a non-revival rule, meaning a payment or acknowledgment on a time-barred consumer debt won't restart that 3-year clock. The law also blocks contracts from importing a longer out-of-state limitations period through a choice-of-law clause.
See how New York's 3 years deadline compares to all 20 states.
Does New York have its own debt collection law beyond the federal FDCPA?
New York General Business Law § 601 bars tactics like impersonating law enforcement, collecting fees you never agreed to, or faking legal process — and unlike the federal FDCPA, it applies to original creditors, not just third-party collectors. If you're in New York City specifically, there's another layer: the Department of Consumer and Worker Protection requires its own Debt Collection Agency License, with rules stricter than federal law even for out-of-state collectors reaching NYC residents.
One gap worth knowing: NYC's licensing rules don't carry over the federal FDCPA's exclusion for debt that wasn't already in default when a servicer took it over. That means some communications that would be exempt under federal law can still trigger NYC-specific obligations.
Where can I find free or low-cost legal help in New York?
If you're dealing with a debt lawsuit, garnishment, or collector dispute in New York, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.