Debt Collection Laws in New York
New York caps wage garnishment for consumer debt, protects a base amount of home equity and bank funds from creditors, and sets a statute of limitations after which a debt lawsuit generally can't succeed. Data current as of July 2026 — see sourcing per section below.
How much of my paycheck can be garnished in New York?
New York caps wage garnishment for ordinary money judgments at the lesser of 10% of gross income or 25% of disposable earnings, and 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 can be withheld at all for consumer debt.
New York's 10%-of-gross-income cap is notably stricter than the federal default of 25% of disposable earnings — most debtors in New York will find the 10%-of-gross figure is the lower, controlling number, since gross income is a larger base than disposable earnings but the percentage applied to it is much smaller.
Support enforcement (child support and spousal maintenance arrears) runs under a separate, much higher withholding schedule (CPLR § 5241, up to 50-65% depending on arrears and other support obligations) and isn't limited by the consumer-debt cap described here.
Can a creditor take money from my bank account in New York?
New York automatically protects up to $2,500 of funds in a bank account that trace to statutorily exempt income received electronically in the prior 45 days (Social Security, SSI, public assistance, unemployment, disability, child/spousal support, pensions, veterans' benefits), plus a separate general judgment exemption currently set at $3,425. Banks must serve a specific exemption-claim notice on account holders when a restraining notice hits their account.
These two protections work differently: the $2,500 exempt-income protection (CPLR § 5222-a) is about the source of the money, while the $3,425 general exemption (CPLR § 5205(l)) applies regardless of source. Both figures are periodically adjusted by the NY Department of Financial Services — the $3,425 figure took effect April 1, 2024, with the next scheduled adjustment April 1, 2027.
Is my home protected from creditors in New York?
New York's homestead exemption ranges from $75,000 to $150,000 depending on county, under CPLR § 5206 — the highest tier ($150,000) applies to New York City's five boroughs plus Nassau, Suffolk, Rockland, Westchester, and Putnam counties; a $125,000 tier covers several Hudson Valley/Capital Region counties; all remaining counties get $75,000.
These figures were last set in 2020 and are indexed for adjustment roughly every 3 years by statute. Multiple bills to raise the tiers (to as much as $250,000 for the top bracket) were pending in the 2025-2026 legislative session but had not been confirmed signed into law as of this writing — check current status before relying on a specific figure.
How long can a debt collector sue me in New York?
New York shortened its statute of limitations for consumer debt (credit cards, medical bills, and similar consumer credit transactions) from 6 years to 3 years, effective April 7, 2022, under the Consumer Credit Fairness Act (CPLR § 214-i). Non-consumer written contracts remain 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 |
The Consumer Credit Fairness Act also added a non-revival rule: a payment or acknowledgment on a time-barred consumer debt does not restart the 3-year clock, and the law overrides contractual choice-of-law clauses that might otherwise try to import a longer out-of-state limitations period.
Does New York have its own debt collection law beyond the federal FDCPA?
New York General Business Law § 601 bars collection practices like impersonating law enforcement, collecting unauthorized fees, and simulating legal process, and — unlike the federal FDCPA — applies to original creditors, not just third-party collectors. Inside New York City specifically, the Department of Consumer and Worker Protection requires its own Debt Collection Agency License, with rules that are stricter than federal law even for out-of-state collectors reaching NYC residents.
The NYC licensing regime notably omits the federal FDCPA's exclusion for debt that wasn't already in default when a servicer took it over — meaning some communications exempt from FDCPA coverage can still trigger NYC-specific obligations.
Where can I find free or low-cost legal help in New York?
New York residents dealing with a debt lawsuit, garnishment, or collector dispute can start with the state bar's lawyer referral service or a legal aid organization below — both can point to self-help court resources even for people who don't qualify for free representation.