N.Y. Suspends Debt Collection on Bills Owed To, Collected By, State AG

The state of New York announced yesterday that it is suspending all debt collection activities on debts that are owed to the state, including student loans and medical debts, for 30 days while residents deal with the coronavirus pandemic.

The 30-day suspension may be extended, depending on the situation at that time, the Governor and Attorney General of New York announced yesterday.

The state also announced that interest on the debts will not accrue during the period where debt collection has been suspended.

While everyone in New York may think they can stop making payments on any student loan or medical debt, the state only suspended debts that were owed to the state and being collected by the Office of the Attorney General. About 165,000 accounts fit that criteria, according to the governor’s office. The debts that fall under the suspension are those involving:

  • Patients who owe medical debt due to the five state hospitals and the five state veterans’ home;
  • Students who owe student debt due to State University of New York campuses; and
  • Individual debtors, sole-proprietors, small business owners, and certain homeowners who 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.

“As the financial impact of this emerging crisis grows, we are doing everything we can to support the thousands of New Yorkers that are suffering due to disruptions caused by the COVID-19 pandemic,” Governor Andrew Cuomo said in a statement. “This new action to temporarily suspend the collection of debt owed to the state will help mitigate the adverse financial impact of the outbreak on individuals, families, communities and businesses in New York State, as we continue to do everything we can to slow the spread of the virus.”

Residents of New York who have debts other than medical or student loans that are owed to the state may apply to have collection activity on those debts suspended as well.

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