Even though the state seems to be controlling the number of coronavirus cases and in the face of other states relaxing the collection restrictions that they have put in place, the Attorney General of New York has extended — for the fifth time — a moratorium on collecting certain debts that are owed to the State of New York.
The new order remains in effect until September 4.
“Although New York has had remarkable success in containing the coronavirus, too many New Yorkers are still enduring the financial hardships of this pandemic,” said Attorney General Letitia James, in a statement. “We have the power to help tens of thousands of New Yorkers who are struggling to make ends meet, which is why we are again suspending the collection of state student and medical debt referred to my office.”
Among the types of debt that are not to be collected are:
- Medical debt owed to one of five state hospitals and five state veterans’ homes
- Student loans owed to SUNY campuses
- Debt related to oil spill cleanup, removal, property damage, breach of contract, and other fees owed to state agencies by certain individuals, small business owners, and homeowners
The accrual of interest and collection of fees on all outstanding state medical and student debts are also suspended, according to a release from the Attorney General’s office.
Many states enacted restrictions aimed at protecting consumers who may have been impacted by the COVID-19 pandemic. But in recent weeks, most of those states have begun to undo those protections and allow businesses, including companies in the credit and collection industry, to operate under pre-pandemic rules.
The announcement from the Attorney General coincides with an executive order from New York Gov. Andrew Cuomo, which tolled the statutes of limitation until September 4.
