On December 31st, 2021, Governor Kathy Hochul signed the Consumer Judgement Interest Act (S.5724A/A.6474A) to protect New Yorkers from the excessive interest rate on money judgments arising out of consumer debt, including medical and student debt, by capping judgment interest rates to two (2) percent.
Previously, the consumer debt judgment interest rates were nine (9) percent. The law will take effect in 120 days from 12/31/21 and will apply to all money judgments arising from consumer debt, including judgments that are not yet fully paid and satisfied as of the effective date of the act. If a resident receives a Summons and Complaint on a consumer matter, it is important to seek legal advice or go to court as soon as possible. A judgment cannot be received by a creditor unless the creditor goes to court and sues a debtor. If a judgment is received, the judgment creditor is entitled to garnish wages of, freeze the bank account of, or put a lien on the property of a judgment debtor. Wages can only be garnished if the judgment debtor is earning more than $420/week after taxes. Bank accounts that contain only exempt funds, such as social security and unemployment, cannot be frozen. Bank accounts that contain less than $3360 cannot be frozen by a judgment creditor. Nassau Suffolk Law Services provides legal representation and advice to eligible Nassau and Suffolk residents experiencing consumer debt problems, especially in matters of medical and credit card debt. Suffolk residents can call 631-232-2400. Nassau residents can call 516-292-8100.
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