New York Commercial Debt Collection: CPLR Tools & Court Strategy
New York Commercial Debt Collection: Where the Law Favours Creditors
Why New York Works for Commercial Creditors
New York's commercial debt collection framework is among the most creditor-friendly in the United States. The combination of 9% statutory interest (CPLR §5004), immediate bank account freezes via restraining notices (CPLR §5222), and the Commercial Division's specialised handling of complex claims gives creditors tools that most states don't offer.
For international creditors, New York has an additional advantage: many cross-border commercial contracts specify New York law and New York courts. If your contract includes this clause, your collection strategy benefits from one of America's most sophisticated commercial court systems — regardless of where the debtor operates.
The Commercial Collection Process
Phase 1 — Demand with teeth. A formal demand from a New York-licensed collection agency or attorney, citing the contract, outstanding amount, accrued interest at 9% per annum, and a specific deadline. The demand should reference the creditor's willingness to file in Supreme Court — this isn't bluster in New York, where commercial litigation is routine.
Phase 2 — Amicable resolution. Resolution rates for commercial debts under 12 months: approximately 55-65%. New York's sophisticated business community responds to professional, documented demands. The debtor's counsel understands the enforcement landscape and advises accordingly.
Phase 3 — Supreme Court filing. New York Supreme Court (the trial-level court) handles commercial claims. For claims above $500,000 in Manhattan, the Commercial Division provides judges with specialised commercial expertise. Summary judgment under CPLR §3212 for undisputed debts: 6-12 months.
Phase 4 — Enforcement. New York's enforcement arsenal is powerful. Restraining notices (CPLR §5222) freeze the debtor's bank accounts immediately upon service — no court hearing required. Property execution (CPLR §5230) attaches business assets. Information subpoenas (CPLR §5224) compel the debtor to disclose all assets under oath.
The 9% Advantage
New York's 9% statutory interest rate under CPLR §5004 is one of the highest in the United States. On a $500,000 claim outstanding for two years, this adds $90,000 to the judgment. This high rate creates a strong incentive for debtors to resolve claims early — every month of delay increases the total obligation significantly.
Key Parameters
Statute of limitations: 6 years for breach of contract under CPLR §213.
Confession of judgment: New York permits confessions of judgment (CPLR §3218) — a pre-signed document allowing the creditor to obtain judgment without litigation. If your contract includes this provision, enforcement is virtually immediate.
New York commercial debt collection rewards preparation, documentation, and willingness to use the court system. The tools are there — the question is whether your agency knows how to deploy them.
