New York Changes Remedies Available for the Collection of Certain Medical Debt

The amendments to New York CPLR sections 5201(b) and 5231(b)(iv), which became effective November 23, 2022, have resulted in some wide-sweeping changes to the collection remedies available in the medical debt arena. Specifically, public healthcare facilities (i.e., hospitals, nursing homes, etc.) and healthcare providers (i.e., doctors, dentists, chiropractors, etc.) are now prohibited from:

• Imposing and enforcing a “property lien . . . against a debtor’s primary residence in an action arising from a medical debt . . .”; and
• Securing and collecting on a wage garnishment to satisfy judgments arising from medical debt lawsuits.

Although significant in their scope, these changes do not appear to foreclose all medical debt collection remedies. It appears that a judicial lien can still be imposed and enforced against an individual’s real estate that is not their primary residence, such as vacation homes, rental properties, hunting camps, vacant lots, etc. Further, it appears that the holder of a medical debt judgment can still restrain, and collect from, an individual’s bank account as long as the amount on deposit exceeds the exempt amount.

While historically New York has been a very creditor-friendly jurisdiction, these and other recent statutory changes (addressed in other sections of this Blog and website) seem to be tipping the New York scales toward the debtor-friendly side.