New York Debtor and Creditor Law

There are a various state laws governing debtors and creditors, and New York Debtor and Creditor Law involves a variety of codes, applications, and important definitions.   

What is a Debtor Under New York Law?

A debtor is simply an individual or corporation that owes money to another person or corporation. 

What is a Creditor Under New York Law?

New York recognizes three types of creditors:

• Lien-holders – those who hold a lien against a property.  The property or its sale must be used to pay what the debtor owes the creditor in these cases, before any of the debtor’s other bills are paid.
• Priority-interest creditors – this creditor must have his bill paid first before others, and after lien-holders, in the event that a debtor cannot pay his or her debts.  These creditors are granted priority interest by New York and/r federal law in specific cases.  For example, Congress has determined that money owed to the Federal Government, no surprisingly, is considered a priority interest.
• Other creditors – creditors that do not hold liens or priority interests comprise the third category of creditors under New York law.

What is New York Debtor and Creditor Law?

New York’s laws governing debtors and creditors oversee the situations when a debtor is unable to pay a debt, of some monetary amount, to a creditor. 

What Rights Do Creditors Have Under New York Law?

Creditors have a variety of options available under New York law to collect money owed to them.  Specifically, property might be seized and/or liens placed against properties, wages garnished, and even some good seized to recover money owed.  For example, in some cases creditors can take security deposits and interest under New York law.   

In most cases when money is to be collected in any of these forms, a third-party collector needs to be involved.  The courts and other legal processes must be followed to ensure the legality and correct application of New York law. 

What Rights do Debtors Have Under New York Law?

Debtors who find themselves unable to pay what they owe have the right to seek negotiation and remediation with their creditors.  They also can turn to bankruptcy as a last resort to resolve debts.  Bankruptcy law is governed by a number of federal statutes that supersede New York Debtor and Creditor Laws, so debtors are advised to seek legal counsel when seeking to address what they owe.

Getting Help

If you are having problems with your creditors, you should consult with an experienced attorney as soon as possible. Your lawyer can explain to you what your rights are and how you can handle your tough financial situation so you can resolve any problems you may be experiencing.