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Financial Services Law Insights and Observations

New York continues to postpone collection on certain debts

State Issues Covid-19 New York State Attorney General Debt Collection Student Lending

State Issues

On February 1, the attorney general of New York announced an extension of its previous order to halt the collection efforts on certain debts through February 28, 2021. Consumers with student loan debt and medical debt owed to the state will receive an additional 28-day hiatus on payments including a freeze on the accrual of interest on the debts—in order to allow them to deal with the effects of Covid-19. Specifically, the moratorium on collection applies to: (i) “[p]atients that owe medical debt due to the five state hospitals and the five state veterans' home[s]”; (ii) “[s]tudents that owe student debt due to State University of New York (SUNY) campuses”; and (iii) “[i]ndividual debtors, sole-proprietors, small business owners, and certain homeowners that owe debt relating to oil spill cleanup and removal costs, property damage, and breach of contract, as well as other fees owed to state agencies.” New Yorkers who have other types of debt that are owed to the state and who are referred to the Office of the Attorney General may apply for a temporary freeze on collection by submitting an application which can be found here.

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