New York Demand Letter

Introduction

Key Things to Know

1. 1

   If your claim involves a dishonored check, New York requires a TWO-STEP written demand before you can collect additional liquidated damages beyond the check's face amount: a first demand sent by both first class mail and certified mail, then a second demand sent by first class mail only, on or after the fifteenth day following receipt of the first (N.Y. Gen. Oblig. Law Section 11-104(1), (7)). The drawer then has thirty days from the date you mail the second demand to pay before additional liquidated damages become collectible.

2. 2

   New York's bad-check liquidated damages depend on why the check bounced: up to the lesser of twice the face amount or seven hundred fifty dollars if there was no account at the drawee bank, or up to the lesser of twice the face amount or four hundred dollars for insufficient funds (Gen. Oblig. Law Section 11-104(2)-(3)). No liability attaches if the check paid residential rent, a residential utility bill, or a debt secured by collateral you already repossessed.

3. 3

   New York's deceptive-practices statute, General Business Law Section 349, requires no pre-suit notice or demand at all: a private plaintiff injured by an unfair or deceptive act may sue immediately under Section 349(h) for actual damages or fifty dollars, whichever is greater, with a discretionary award of up to three times actual damages, capped at one thousand dollars, for a willful or knowing violation.

4. 4

   If you are the original creditor collecting your own consumer debt, not only a third-party collection agency, New York's General Business Law Article 29-H (Section 601) still limits your letter: it bars simulating a law enforcement officer or government agency and claiming or threatening to enforce a right you have no reason to believe exists. Keep the tone factual: never threaten arrest, jail, or criminal prosecution to collect a civil debt.

5. 5

   Mind New York's statute of limitations: six years to sue on most written or oral contracts, or on an open account, under C.P.L.R. Section 213(2), which excepts sale-of-goods contracts under Uniform Commercial Code Article 2 and claims governed by Section 214-i, and three years to sue for injury to property under Section 214(4).

6. 6

   New York's small claims dollar limit depends on the court: ten thousand dollars in New York City Civil Court, five thousand dollars in a City Court outside New York City or a District Court, and three thousand dollars in a Town or Village Justice Court, each exclusive of interest and costs (N.Y. City Civ. Ct. Act, Uniform City Ct. Act, Uniform Dist. Ct. Act, and Uniform Justice Ct. Act, each Section 1801).

7. 7

   New York's legal interest rate is nine percent a year on most claims under C.P.L.R. Section 5004(a), but only two percent a year on a judgment or accrued claim for a consumer debt owed by a natural person for personal, family, or household purposes. Interest runs from the date your claim accrued, not from the date you send this letter, under Section 5001(b).

New York Requirements for Demand Letter

• Two-Step Bad-Check Demand Sequence

  N.Y. Gen. Oblig. Law Section 11-104(1), (7) requires a first written demand sent by both first class mail and certified mail return receipt requested, followed by a second written demand sent by first class mail on or after the fifteenth day following receipt of the first, before additional liquidated damages on a dishonored check become collectible.

• Statutory Bilingual Bad-Check Demand Form

  Gen. Oblig. Law Section 11-104(8) prescribes the exact bilingual text, in at least 10-point type, that both the first and second written demands must use. A general demand letter must not imitate this form; it should instead note that the statutory notice is a separate document.

• Bad-Check Damages Capped by Reason for Dishonor

  Gen. Oblig. Law Section 11-104(2)-(3) caps additional liquidated damages at the lesser of twice the face amount or seven hundred fifty dollars for a check dishonored for no account, or the lesser of twice the face amount or four hundred dollars for insufficient funds, with the court setting the exact amount within that cap.

• No Pre-Suit Notice Under GBL 349

  General Business Law Section 349(h) lets a private plaintiff injured by an unfair or deceptive act sue immediately, with no pre-suit demand or notice step, recovering actual damages or fifty dollars, whichever is greater, plus a discretionary award of up to three times actual damages, capped at one thousand dollars, for a willful or knowing violation.

• Principal-Creditor Collection Act Limits

  General Business Law Article 29-H, Section 601, restrains a principal creditor collecting its own consumer debt, not only a third-party collector, from simulating a law enforcement officer or government agency, disclosing a disputed debt without disclosing that it is disputed, or claiming or threatening to enforce a right it has no reason to believe exists.

• Never Threaten Arrest or Prosecution

  A demand letter must never threaten arrest, jail, or criminal prosecution to collect a civil debt. New York's collection-conduct statute bars a creditor from claiming or threatening to enforce a right it has no reason to believe exists (Gen. Bus. Law Section 601(8)); the statute does not name arrest or criminal charges, but a false threat of criminal action would likely fall under it where Article 29-H applies, which is only to consumer credit claims.

• Three-Tier Small Claims Limits

  New York's small claims limit varies by court: ten thousand dollars in New York City Civil Court, five thousand dollars in a City Court outside New York City or a District Court, and three thousand dollars in a Town or Village Justice Court, each exclusive of interest and costs (N.Y. City Civ. Ct. Act, Uniform City Ct. Act, Uniform Dist. Ct. Act, and Uniform Justice Ct. Act, each Section 1801).

• Six-Year Limit on Contract and Open-Account Claims

  C.P.L.R. Section 213(2) gives six years to sue on most written or oral contracts or an open account, with no shorter period for an oral contract but with exceptions for sale-of-goods contracts under Uniform Commercial Code Article 2 and claims governed by Section 214-i, and Section 214(4) gives three years to sue for injury to property.

• Split Legal Interest Rate

  C.P.L.R. Section 5004(a) sets legal interest at nine percent a year generally, but also sets it at two percent a year on a judgment or accrued claim for a consumer debt owed by a natural person for personal, family, or household purposes; Section 5001(b) computes interest from the date the claim accrued, not from the date of a demand.