Temporary Suspension Of New York State Debt Collection

Published on March 17, 2020, 5:30 am
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New York Attorney General Letitia James and New York Governor Andrew M. Cuomo today announced that — effective immediately — the state will temporarily halt the collection of medical and student debt owed to the State of New York and referred to the Office of the Attorney General (OAG) for collection, for at least a 30-day period, in response to growing financial impairments resulting from the spread of 2019 novel coronavirus (COVID-19).

Countless New Yorkers have been impacted — directly or indirectly — by the spread of COVID-19, forcing them to forgo income and business. In an effort to support these workers and families and ease their financial burdens, the OAG will halt the collection of medical and student debt owed to the State of New York and referred to the OAG for collection from March 17, 2020 through April 16, 2020. After this 30-day period, the OAG will reassess the needs of state residents for a possible extension.

Additionally, the OAG will accept applications for suspension of all other types of debt owed to the State of New York and referred to the OAG for collection.  

“In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden,” said Attorney General James. “New Yorkers need to focus on keeping themselves safe and healthy from the coronavirus, and therefore can rest assured that state medical and student debt referred to my office will not be collected against them for at least 30 days. This is the time when New Yorkers need to rally around each other and pick each other up, which is why I am committed to doing everything in my power to support our state’s residents.” 

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

The OAG collects certain debts owed to the State of New York via settlements and lawsuits brought on behalf of the State of New York and state agencies. A total of more than 165,000 
matters currently fit the criteria for a suspension of state debt collection, including, but not limited to: 

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

The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program. 

New Yorkers with non-medical or non-student debt owed to the State of New York and referred to the OAG, may also apply to temporarily halt the collection of state debt. Individuals seeking to apply for this temporary relief can fill out an application online or visit the OAG’s coronavirus website to learn more about the suspension of payments. If an individual is unable to fill out the online form, they can also call the OAG hotline at 1-800-771-7755 to learn more.

Separately, in an effort to support New Yorkers in the fight against the coronavirus, Attorney General James has sent multiple cease and desist letters to individuals and companies selling and marketing certain products as treatments or cures for the coronavirus, including Alex JonesThe Silver Edge company, Dr. Sherill Sellman, and televangelist Jim Bakker

There is currently no Food and Drug Administration (FDA)-approved vaccine to prevent the disease or treatment to cure it, and the World Health Organization has also said that there is no specific medicine to prevent or treat the coronavirus. 

Additionally, Attorney General James has issued cease and desist notifications to multiple businesses in New York for charging excessive prices for hand sanitizers, disinfectant sprays, and rubbing alcohol — a violation of New York’s price gouging statute. That statute prohibits the sale of goods and services necessary for the health, safety, and welfare of consumers at unconscionably excessive prices during any abnormal disruption of the market. 

The OAG continues to surveil and monitor businesses across the state for potential scams and price gouging schemes designed to exploit public concern related to the spread of the coronavirus. Scammers commonly exploit real public health concerns and use heightened public fear to prey on consumers and profit from frauds related to those health fears. If a consumer believes they have been the victim of a scam or have witnessed potential price gouging, they can report these incidents to the OAG.

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