New York Statute of Limitations on Business Debt: 6 Deadlines That Kill a Collection Claim

Collection claims die on calendars more often than on merits. Six clocks run against the New York business debt collector from the first missed payment through the last enforcement paper, and the debtor who can read those clocks knows which demands carry a live claim and which carry only stationery.

1. Six Years to Sue on the Contract

CPLR 213 gives contract actions six years, covering obligations express or implied outside the enumerated exceptions, and the MCA agreement, however styled as a purchase of receivables, faces that limit where a court treats it as a contractual liability. Characterization, accrual, and tolling remain counsel questions, because the date the clock starts turns on breach, acceleration, and the agreement terms rather than the first demand letter (accrual dates in MCA files draw frequent dispute, and the dispute itself can consume a year). A complaint filed in year seven answers a limitations defense with nothing except the hope that nobody raises it. Rarely does a limitations defense arrive with clean dates. Resist the urge to assume the funder measured the calendar before filing, and the measurement belongs to counsel.

2. The Signed Writing That Restarts the Clock

General Obligations Law 17-101 permits revival only through a signed writing acknowledging the debt or promising payment, which the statute treats as competent evidence of a new or continuing contract lifting the time bar. The revival rule, if precision matters here, and it does, fits in a single section. This is the entire law of revival in one paragraph, and it fits in one paragraph because the statute says little else. A phone apology, even casually offered, creates no such contract. A partial payment stands on separate ground, since the statute preserves the effect of principal and interest payments as a question apart from signed acknowledgment, and whether a payment revived a particular obligation belongs to counsel and the payment record rather than to instinct.

The confession of judgment, which defenders of the MCA industry will insist reflects free negotiation, supplies the funder with an enrolled judgment that renders the limitations fight moot from the start. You sign the contract and then you discover what the contract means. January motion parts move at winter pace, and a limitations defense filed in that season waits longer for its hearing, though the dates inside the papers wait for nothing.

3. Ten Years to Renew, on Narrow Terms

A money judgment does not live forever on its own strength. CPLR 5014 permits an action upon a New York money judgment only between the original parties, and only where ten years have elapsed since first docketing, with suit allowed in the year before expiry, or where the judgment went by default on other than personal service, or where the court so orders. Counsel diaries the window to ensure the renewal action lands inside it. The lien of a renewal judgment takes effect at ten years from first docketing, which means the creditor who drifts past the window discovers that enforcement tools built for a live judgment are a poor fit for a dead one. Renewal extends enforceability through a new action, if the statutory terms are precise about anything, and precision here is everything.

4. Ten Years of Lien on the Land

CPLR 5203 binds the county real property from docketing until ten years after filing of the judgment roll, defeating later transfers outside the enumerated protections for prior liens, purchase money mortgages, and judicial sales. Often the lien is calendared and the levy forgotten. Extension runs only for stayed time or advertisement and sale time on an execution delivered before expiry, on noticed motion to the last known address, personally or by registered or certified mail with return receipt requested, and the papers that omit that proof go nowhere. A decade of creditor silence leaves the lien intact. The eleventh year leaves nothing. The land clock is extremely patient, and patience favors whoever calendars it. The extension matches the stayed period day for day, and no longer. Whether tolling agreements save any particular file is a question for the agreement and counsel, not for this article.

5. One Year of Restraint, Ninety Days of Levy

Enforcement papers carry their own short fuses. A restraining notice served on a third party holds property and after acquired debts until one year after service or satisfaction or vacatur, whichever event first occurs, while the debtor restraint lasts until satisfaction or vacatur, and more than one notice on the same person for the same judgment needs leave of court. Levy by service of execution voids at ninety days except as to property conveyed to the sheriff or placed inside a turnover proceeding, a deadline that moves with extreme speed once counted in business days rather than months. Have counsel calendar both dates to ensure neither passes unmarked. The creditor who mistakes these windows for suggestions learns the content of CPLR 5239 from the wrong side of the courtroom, and that education is never inexpensive.

6. The Interest Clock That Rewards Delay Against the Debtor

Money judgments bear interest from entry, and business debt takes the nine percent rate where the obligation is not consumer debt for personal, family, or household purposes, characterization being counsel work. Delay costs the debtor money every day the creditor waits. Creditors sometimes wait in order to let interest do the work that enforcement would have done, which reverses the usual intuition that time favors the party holding the funds. Where the rate changes, the creditor must issue amended restraints and executions, and each amendment restarts no clock except the arithmetic. The multiplication continues whether or not anyone watches it, at an extremely steady rate.

Delancey Street reviews and analyzes which of the six clocks has run on a given MCA file, as a settlement company rather than a law firm, and the objective is to ensure independent counsel tests every limitations and duration defense before any payment revives what time had buried. Steps taken, or not taken, in the first weeks after a demand letter shape all six clocks at once.

The Calendar as a Defense

Statutes of limitation allocate the cost of stale claims to the party who slept, and New York distributes that cost across six separate deadlines rather than one. The debtor who inventories them all trades dread for arithmetic. Arithmetic, unlike dread, can be answered.