State suspends debt collection

The financial crippling that is spreading along with the coronavirus has led the state to suspend debt collection for at least 30 days, starting today.

New York’s attorney general, Letitia James, and governor, Andrew Cuomo, announced on Tuesday that medical and student debts referred to the Office of the Attorney General for collection will not be collected through April 16.

After this 30-day period, the attorney general’s office will reassess the needs of state residents for a possible extension. Additionally, the office will accept applications for suspension of all other types of debt owed to the state and referred to the attorney general’s office for collection. 

Separately, 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 Jones, The Silver Edge company, Dr. Sherill Sellman, and televangelist Jim Bakker.

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

Additionally, 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.

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, the announcement says. If consumers believe they have been victims of a scam or have witnessed potential price-gouging, they can report these incidents to the OAG.



The attorney general’s office collects certain debts owed to the state through settlements and lawsuits brought on behalf of the state and state agencies. The announcement explained that 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 who owe medical debt due to the five-state hospitals and the five-state veterans’ home;

— Students who owe student debt due to State University of New York (SUNY) campuses; and 

— Individual debtors, sole-proprietors, small-business owners, and certain homeowners who 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 office 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 and referred to the attorney general’s office 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 office’s coronavirus website to learn more about the suspension of payments. If an individual is unable to fill out the online form, he or she may also call the office’s hotline at 1-800-771-7755 to learn more.

— Melissa Hale-Spencer

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