New York Statute of Limitations & Utility Bill
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- In New York, a plaintiff has 6 years to take action on a contract.
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I have an unpaid utility bill in New York from 7 years ago that just appeared on my credit report. Is that legal?
I live in NY, can a gas company report an unpaid bill from the year 2003 (7 yrs later) for the amount of $116 dollars that I did not know that I owed, to the credit agency (TransUnion, Equifax and Experian)? When I initially started my new service with the gas company in 2009, I was never told that there was an old balance owed.
According to the Laws of New York CVP Article 2 § 213, a plaintiff has 6 years to take action on a contractual obligation or liability.
However, CVP Article 2 § 213 concerns using the courts of New York to get a legal remedy for a debt. Parties are not bound privately by CVP Article 2 § 213. By that I mean, the utility may be time-barred from asking a New York court for a judgment regarding your $116 unpaid bill, but it is not barred from collecting the debt privately. The utility is within its rights in New York to refuse to do business with a former customer who has an outstanding balance on their account. (This is not the case in all states, however.)
Therefore, even though the statute of limitations has passed, it is within the utility’s right to condition doing business with you on your making your account current.
To learn more, read New York's Debtor and Creditor state statutes.
Seven-Year Rule
Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for up to 7½ years. To determine when an account will be removed by the CRAs (TransUnion, Equifax, and Experian and others), add 7 years to the date of first delinquency. The date of first delinquency is shown in credit reports. Subsequent activity, such as resolving the debt or one debt collector selling the debt to another collector, is irrelevant to the 7-year rule.
Some debts have a reporting period longer than 7 years, including:
- Tax liens: 10 years if unpaid, or 7 years from the payment date
- Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
- Perkins student loans: Until paid in full (20 U.S.C. §1087cc(c)(3))
- Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
- Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer
The FCRA 7-year rule is separate from state statutes of limitations for debt issues.
Here, the unpaid bill can appear on your credit report from the month in 2003 that the account became delinquent plus 7 years. The date that you paid the balance due is irrelevant to the 7-year rule. Monitor your credit report to be certain this derogatory entry is deleted at the appropriate time.
See the Bills.com resource Collections Agencies, Collections Laws and Your State’s Statute of Limitations to learn more about the nuances of collections, and what the statute of limitations does and does not mean.
I hope this information helps you Find. Learn & Save.
Best,
Bill
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Dealing with debt
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
Each state has its rate of delinquency and share of debts in collections. For example, in Kentucky credit card delinquency rate was 4%, and the median credit card debt was $435.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
Yes, they can report a delinquent bill. I
f the information is accurate, then it will drop off 7 years after the delinquency. Since it is an old bill, the major damage to your credit has already been done. You should keep on top of your credit report.
It sounds as if the statute of limitations (SOL) is about to run out. If the SOL is almost over, then you might be best off by not contacting the creditor. However, if the creditor does decide to seek a court judgment, then do not ignore the summons.If the SOL expired, then you can enter an affirmative defense. If the SOL hasn't expired, then you might want to reach a settlement and avoid a public judgment.
In terms of improving your credit, make sure that you make all of your payments on time. Keep open a few tradelines, preferably an assortment of credit types. Avoid the minimum payment cycle on your credit cards and keep your credit utilization low.