New York Debt Collection Laws: The 10% Income Execution Cap and the 3-Year Credit Card Deadline

A New York creditor cannot take money from a paycheck or a bank account on the strength of an unpaid bill alone. It has to sue, win a judgment, and then use one of New York's specific enforcement tools, most often an income execution against wages or a restraining notice against a bank account. Most of these cases begin with a default judgment entered because the person sued never answered, which makes responding to the summons the single highest-value move available. New York's rules that follow are, in several places, meaningfully more protective than the federal floor, and one of them has changed recently enough that older summaries of New York law get it wrong.

New York's Income Execution: The 10% Ceiling and the Disposable-Earnings Floor

New York enforces most consumer judgments through an income execution under CPLR 5231, and the statute layers two protections on top of each other. The base rule caps withholding at 10% of gross income. On top of that sits a version of the federal disposable-earnings test: nothing may be withheld for any week unless disposable earnings for that week exceed 30 times the greater of the federal or New York state minimum hourly wage, and even then the amount withheld is the lesser of 25% of disposable earnings or the excess over that floor.

For most working New Yorkers, the 10%-of-gross number is what actually binds, since it is almost always the smaller figure. New York's minimum wage for 2026 is $17.00 an hour in New York City, Long Island, and Westchester County, and $16.00 an hour in the rest of the state, which puts the 30-times floor at $510 a week in the higher-wage region and $480 a week elsewhere. Below that floor, nothing can be withheld at all.

Child support runs under a separate, higher federal framework, and a support deduction already in place reduces the room available under the 25% ceiling for any other execution, so a debtor with an active support order and a separate income execution should not assume both amounts stack cleanly on top of each other without review.

Automatic Bank Account Protection: EIPA

New York is one of the more protective states for bank accounts specifically because the protection is automatic. Under the Exempt Income Protection Act, codified at CPLR 5222(i), a restraining notice or levy simply does not reach the greater of 240 times the federal minimum wage or 240 times the New York minimum wage in an individual's account. For 2026 that works out to $4,080 in the New York City metro region and $3,840 in the rest of the state, and the bank must apply the shield without you filing anything.

A second, separate EIPA layer protects direct-deposited exempt benefits specifically, things like Social Security, SSI, pensions, child support, and unemployment. If those payments were deposited within 45 days before a restraint, the bank must additionally protect a CPI-indexed amount with a statutory base of $2,500 under CPLR 5222(h); the most recent adjustment on record put that figure at $3,425 as of April 2024, with the next scheduled adjustment in April 2027. Confirm the current figure with the state Department of Financial Services before relying on an exact number in a specific case.

A third rule protects wages after they land in the bank: CPLR 5205(d)(2) exempts 90% of earnings for personal services rendered within the last 60 days, on top of the EIPA amounts above.

Job Protection Beyond Federal Law

Federal law only bars firing an employee over a single garnished debt. New York goes further. CPLR 5252 forbids an employer from discharging, disciplining, refusing to promote, or refusing to hire someone because «one or more» wage assignments or income executions have been served, explicitly covering multiple garnishments, not just the first. Violations carry penalties up to $500 for a first offense and $1,000 for later ones, and an affected employee can sue within 90 days for up to six weeks of lost wages plus reinstatement.

State Tax Garnishment

New York's Department of Taxation and Finance uses its own income execution, and its published guidance describes the same structure as the court-ordered version: 10% of gross income, or 25% of disposable earnings, whichever applies, with the lesser figure governing in practice.

Medical Debt: Garnishment Banned Outright

A 2022 amendment to CPLR 5231 bars income executions entirely on judgments arising from medical-debt actions brought by hospitals licensed under Public Health Law article 28, or by health care professionals authorized under Education Law title 8. If a medical creditor of that kind has a judgment against you, wage garnishment is not an available tool at all, regardless of the income-execution math above.

A companion protection sits in CPLR 5201(b), which provides that no property lien shall be entered or enforced against a debtor's primary residence in an action arising from a medical debt brought by that same class of hospital or licensed health care professional. Between the two provisions, a medical-debt judgment of that kind reaches neither the wages nor the home of the person it is entered against.

What a New York Collector May Not Do: General Business Law Article 29-H

New York does not rely on the federal Fair Debt Collection Practices Act alone. General Business Law article 29-H sets the state's own rules of conduct for anyone collecting a consumer claim, and General Business Law 601 lists the practices that are prohibited outright.

Among them: simulating in any manner a law enforcement officer or a representative of a governmental agency; asserting a right to a collection fee that is not actually owed; disclosing or threatening to disclose information affecting the debtor's reputation that the collector knows to be false; communicating the nature of a consumer claim to the debtor's employer before obtaining a final judgment; disclosing information about a debt the collector knows to be disputed without noting the dispute; and communicating with the debtor with such frequency, or at such unusual hours, as can reasonably be expected to abuse or harass.

The list also reaches threats and paperwork. A collector may not threaten any action that the principal creditor does not in fact take in the usual course of business, may not claim or attempt to enforce a right with knowledge or reason to know that the right does not exist, and may not send a communication that simulates legal or judicial process in any manner. Two additions target more modern tactics: remotely disabling a financed vehicle without the required prior written notice, and using a social media platform to collect a debt.

The employer rule and the social media rule are the two easiest for a reader to recognize in the wild. A collector that calls your workplace and describes what you owe before it has a judgment, or that messages you about the debt on a social platform, has run into the statute directly.

Enforcement here is public rather than private. Under General Business Law 602, a violation of section 601 is a misdemeanor, each violation counts as a separate offense, and the Attorney General or a district attorney may bring an action in the name of the people of the state to restrain the conduct. So the practical route for a consumer is to document what happened and report it to the Attorney General, while pursuing the federal FDCPA remedies that do carry a private right of action.

The Statute of Limitations: Why "6 Years" Is Outdated for Most Consumer Debt

For decades, New York treated essentially all contract claims, including credit cards, the same way: 6 years under CPLR 213(2). That is still the rule for ordinary business and non-consumer contract debt, and you may see general resources, including older statute-of-limitations summaries, describe New York debt collection deadlines as a flat 6 years across the board. That description is now incomplete.

The Consumer Credit Fairness Act, signed as chapter 593 of the Laws of 2021 and phased in over the months that followed so that it governs actions commenced from 2022 onward, carved consumer credit transactions out of the 6-year rule entirely. Under CPLR 214-i, a case where the defendant is a purchaser, borrower, or debtor in a consumer credit transaction, which covers the overwhelming majority of credit card, personal loan, and retail installment debt, must be commenced within 3 years. The same law killed revival for that category outright: the statute states plainly that a payment, a written affirmation, an oral affirmation, or any other activity on the debt does not revive or extend the limitations period. For consumer credit specifically, once the 3-year clock runs out, nothing brings it back.

Outside consumer credit, the older rules still apply: 6 years under CPLR 213(2), and reviving a time-barred claim takes a signed writing. General Obligations Law 17-101 makes an acknowledgment or promise contained in a writing signed by the party to be charged the only competent evidence of a new or continuing contract that takes an action out of the limitations period.

New York's own UCC retains its pre-revision Article 3 language, so a reference to «UCC 3-118» in New York does not describe a limitations period the way it does in most other states; consumer-purpose promissory notes fall under the 3-year rule above, and other notes fall under the general 6-year rule.

An expired limitation period, in either category, does not erase the underlying debt. A collector may still ask for payment, and the account can remain on a credit report for up to 7 years on its own separate clock. Suing or threatening suit on a time-barred debt is what federal Regulation F flatly prohibits.

Repossession in New York

New York enacted the standard UCC rule: after default, a secured lender may repossess a financed vehicle without a court order, as long as it proceeds without a breach of the peace, a standard whose exact content is left to New York case law. After repossession, the sale must be commercially reasonable, and a lender that fails to follow the disposition rules can lose or reduce its claim to a deficiency. A servicemember whose loan predates military service cannot be repossessed without a court order under federal law.

A vehicle bought on a retail instalment contract carries an added state protection that the UCC alone does not supply. Under the Motor Vehicle Retail Instalment Sales Act, Personal Property Law 316 requires the holder, within seventy-two hours of such repossession or surrender, to personally deliver or mail the buyer at their last known address a written notice setting out the buyer's right to redeem the vehicle, the dollar amount necessary to redeem it, and the name, address and telephone number of the holder from which redemption information may be obtained. Personal Property Law 302 backs that up: it bars a contract term letting the holder arbitrarily and without reasonable cause accelerate the balance absent a default, and it bars acceleration where the default consisted solely of missed instalment payments and the buyer, after repossession, makes timely tender of an amount sufficient to redeem the vehicle. If no notice arrived within that 72-hour window, that is a defect worth raising before paying a deficiency demand.

If You Are Being Garnished or Sued in New York

Answer the summons before the deadline; a default judgment forfeits every defense, including the statute of limitations. If an income execution is running, check both the 10%-of-gross figure and the disposable-earnings floor for your region. If a bank account is restrained, the EIPA amounts, $4,080 or $3,840 depending on where you bank, should already be protected without any filing; anything above that may need a claimed exemption. If the debt is medical and the creditor is a hospital or licensed health professional, wage garnishment may not be available at all. Do not pay anything on an old, non-consumer debt before confirming how old it is, since a payment there can still matter even though it no longer matters for consumer credit. And when judgments have stacked past what a budget can carry, bankruptcy's automatic stay halts garnishment and bank restraints while the case is pending; the guide to stopping wage garnishment walks through the options in order.

Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.

Related Resources

• Debt Collection Laws by State
• Statute of Limitations on Debt
• How to Stop Wage Garnishment
• Can Social Security Be Garnished?
• New York Statute of Limitations
• New York Bankruptcy

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Last updated: 2026-08-12.

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