Suspension of NYS debt collection renewed for 10th time

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FILE- In this June 15, 2018, file photo, twenty dollar bills are counted in North Andover, Mass. Default on your federal student loans and the government can take up to 15 percent of each paycheck to satisfy your debt. The Education Department can also withhold federal benefits like tax returns and Social Security payments. Garnishment is an effective tool to recoup unpaid loans, private collection agencies enlisted by the Education Department took in over $841.6 million via wage garnishment in the 2018 fiscal year, but it inflicts serious financial strain on borrowers who are already struggling. (AP Photo/Elise Amendola, File)

NEW YORK (WWTI) — The suspension of state debt collection was renewed for the tenth time on Monday.

New York Attorney General Letitia James announced on February 1 that the state has renewed an order to halt the collection of medical and student debt owed to the state of New York that has been specifically referred to the Office of the Attorney General for collection. This order was extended through February 28, 2021.

According to the Office of the Attorney General, this extension was in response to continuing financial impairments resulting from the spread of COVID-19.

“While we continue to vaccinate more New Yorkers every day, our state is still suffering the health and economic effects of this deadly disease,” said Attorney General James. “Hundreds of thousands of businesses have shuttered their doors, millions remain unemployed, and the economic fallout of this public health crisis is still being felt in every corner of our state. In an effort to counter the financial hardships of the COVID-19 pandemic, my office is, once again, renewing the suspension of state and medical debt referred to my office for another month. We must do everything in our power to rebuild our state’s economy and give New Yorkers a helping hand.”

The OAG confirmed that after the extension period, the Office will reassess the needs of state residents for another possible extension.

The suspension of debt collection applies to those who fit the following criteria:

  • Patients that owe medical debt due to the five state hospitals and the five state veterans’ homes
  • Students that owe student debt due to State University of New York (SUNY) campuses
  • 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 policy also automatically suspended the accrual of interest and the collection of fees on all outstanding state medical and student debt.

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. 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.

The Office of the Attorney General stated that over 165 thousand matters fit the criteria for the current debt collection suspension. Monday’s extension renewed an order first made in March of 2020.

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