Nevada Collection Laws

What are the collections laws and statutes of limitations for Nevada residents?

I think I am about to be sued for a debt I left behind 4 or 5 years ago. What is the statute of limitations in Nevada? If they sue and I lose what can happen to me?

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A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, and a lien on the debtor’s property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Nevada Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

n most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

In Nevada, garnishment for child support MUST be given first priority as noted in NRS 31.249 Application to court for writ of garnishment. And, wage garnishment for child or spousal support may be as much as 50% allowable (see #4(a) under NRS 31.295).

In Nevada, wage garnishment is allowed under NRS 31.240, a writ of garnishment may issue at time of issuance of writ of attachment or later. If the judgment-creditor is aware of the debtor's place of employment, it may seek wage garnishment.

Under federal law, the garnishment applies to 25% of the debtor’s net take home pay, (i.e. gross pay less statutorily mandated deductions). Garnishment can occur only after the person being garnished has received a 10-day's notice. Additional exceptions to the limitations on wage garnishment in Nevada may be found under NRS 31.295.

Levy Bank Accounts in Nevada

A levy means that the creditor has the right to take whatever money in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied. Some states call levy attachment or garnishment.

In Nevada, levy is allowed under Chapter 31 - Attachment, garnishment and other extraordinary remedies NRS 31. The collection of monies by attaching or levying bank accounts is described under NRS 104A.4101 Funds transfers.

If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

Lien in Nevada

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Under Nevada statute, liens against a debtor are allowed. For more information on the types of liens allowable under Nevada law, please refer to Chapter 108 - Statutory Liens.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Nevada Statute of Limitations

Each state has its own statute of limitations for consumer-related issues. Here are some of Nevada’s statutes of limitations:

* Under NRS 97A.060, a credit card is defined as an open account. However, one circuit court interpreted this statute to mean a credit card account founded upon a written agreement qualifies for the 6-year statute of limitations (Marshall v. Kleppe, 637 F. 2d 1217, 1244 (9th Cir. 1980)). Reno and Las Vegas justice courts have reputations for applying 4-year SOL for credit card cases when plaintiff cannot provide written credit card application or agreement.

ollection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Nevada Spouse Liability For Debt and Community Property Law

Nevada is a community property state, which means courts presume the assets or liabilities acquired by the couple during marriage are community property.

Pre-marital debts do not become community property upon marriage, unlike other community property states (NRS 123.050). Therefore, Nevada seems to follow the idea of "separate" and "community" debt. Except for real estate purchases, both spouses have free reign to incur debt for which the community is responsible (Marine Midland Bank v Monroe, 104 Nev. 307, 756 P.2d 1193 (1988)). However, only half of a spouse's wages are available to wage garnishment for premarital debt (Rodgers v Rodgers, 110 Nev. 1370, 887 P.2d 269 (1994); Lewis v Hicks, 108 Nev. 1107, 843 P.2d 828 (1992); contra, Phillips v Morrow, 104 Nev. 384, 760 P.2d 115 (1988)).

Nevada recognizes the doctrine of necessaries (NRS 123.090), which requires spouses to support each other with their separate property if no community property assets are available. The burden is higher on husbands than it is on wives (NRS 123.100). What is considered a "necessity" is defined narrowly by Nevada courts.

Nevada Mortgage Foreclosure

If you are at risk for foreclosure, check out the State of Nevada’s Hardest Hit Fund page. Nevada Chapter 1-7 — Deeds of Trust governs foreclosure and deficiency balances. Under Nevada law, the lender may recover any deficiency balance. However, if your servicer participates in the HAFA program, then it is barred from collecting a deficiency balance.

Nevada offers simple and effective foreclosure mediation for distressed homeowners who face foreclosure. See the State of Nevada Foreclosure Mediation Program (FMP) pages at the Supreme Court of Nevada’s Web site for details. If you receive a Notice of Default (NOD), consult with a Nevada lawyer who has experience with FMP. Eligible homeowners have 30 days after receiving a NOD to request mediation. At minimum, working within the FMP puts a hold on foreclosure during the mediation process. Homeowners in the FMP are advised to continue to pay their property taxes and insurance.

Recommendation

Consult with an attorney licensed in Nevada and experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Nevada.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

34 Comments

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  • JC
    Jun, 2012
    James
    I fractured my left hip and elbow due to a bicycle accident, and I had to have surgeries at a hospital, which charged me $500 after the insurance adjustments and payments; however, my insurance EOB indicates that my co-pay is actually $250. Furthermore, I provided the hospital and their billing department the contact information for my supplemental insurance, which pays/adjusts anything that my primary HMO does not cover. According to the supplementary insurance company, the hospital failed to provide them with the requested documentation, and they sent me copies of the letters showing their three attempts of contacting the hospital. The hospital recently turned the $500 bill to a collection agency, and that agency added a $23.66 interest. I faxed, mailed by certified post, and emailed a letter disputing and requesting validations of the debt. The email addresses of the personnel I obtained from their call center bounced back as undeliverable, so I sent another letter to their sales department email address, which did not bounce back. The fax number on their website is disconnected, but the different fax number I got from their call center did go through. If the certified letter I mailed them by USPS returns to me as undeliverable, and they claim after 30days that they never received any correspondence from me disputing the debt then what should I do?
    0 Votes

    • BA
      Jun, 2012
      Bill
      You have two strong arguments in your favor. First, you can prove someone at the collection agency received your request for validation. Second, you can demonstrate to the court the company operated in bad faith when it gave you incorrect contact information (the fax number and the mailing address) for you to validate the debt.

      What to do? If the collection agent does not validate the debt, consult with a lawyer who has consumer law experience to discuss your options available under the FDCPA.
      0 Votes

  • BR
    Apr, 2012
    Bonnie
    My husband and I are short selling our home because of a new job out of state and were notified that a lien was placed on the home in 2007 by a creditor of mine (wife only, prior to this marriage)for a 1994 private loan. My husband is the sole owner and mortgage noteholder, the property was homesteaded and I quitclaimed it to him when it was purchased in 2002 because Nevada is a community property state. Do you know how a creditor could have placed a lien on a property I do not own nor have any fiscal interest in? Thanks in advance!
    0 Votes

    • BA
      Apr, 2012
      Bill
      Nevada is one of the community property states. The presumption is real property titled in Spouse A's name is community property where Spouse B has rights and a claim to the property. In other words, Spouse A's name may not be on the title, but Spouse A's creditors may place a lien on property titled in Spouse B's name. In this regard, community property is double-edged sword.
      0 Votes

  • CJ
    Apr, 2012
    Christina
    Back in May 2007, my husband and I vacationed in Las Vegas for our honeymoon. On May 15, 2007, I visited the emergency department of a local hospital to treat an asthma attack. At the time, I handed both my provincial and private insurance information to the attendant who registered me. Before I forget to mention, I am a Canadian citizen and had 2 private insurance plans in addition to my provincial medical coverage. I was triaged & treated by the ER physician and released within 30 minutes. Before leaving the hospital, I contacted the payment desk and asked if there were any amounts outstanding from my visit that I needed to pay up front (as I was totally aware the healthcare system was different than ours in Canada). I was told that my insurance info was recorded and there was nothing for me to pay, Even though I had a bad feeling, I left the hospital with my prescription & discharge papers.

    Move forward about 9 months and I received a collections notice, stating that I owed over $3000US for my visit. To make a long story short, I contacted my private insurance companies who had me contact the hospital, obtain an itemized statement that I should've received when I was discharged and had the insurance company pay the collections agency in full.

    Move forward to February 2012. I receive a voicemail message from a collections agency based in Irvine, CA stating that I have an outstanding debt. I contact the agency and learn that the amount standing was for physician services during my emergency visit. I explain to the collections agent that all outstanding debts were paid back in 2007. He insists that this claim was for the individual physician that treated me, which is separate from the hospital costs. After requesting for proof, the collections agent mailed me a written letter stating the amount outstanding and the hospital name trying to collect the debt. I have asked him for more proof such as an itemized statement. He told me due to privacy laws, he can only obtain the hospital name and the physician's name. Otherwise he cannot obtain any more information (if it is my file we're dealing with, and he is the agent assigned to my case, why would privacy laws apply?). According to him, he received a statement from the physician's group and has mailed it to me. I received the statement, which is not printed on any letterhead, and it shows that they tried to bill Blue Cross Blue Shield of Nevada (which was not one of my private plans) and that they also had my address as somewhere in Canton, OH).

    My questions:
    1. do any statute of limitations apply to my case? If so, which SOLs would apply, the ones from Nevada (where the actual service took place) or from California (where this collection agency is based)?
    2. If SOLs do apply, what would a medical bill be classified as? An open/closed contract? Written contract?
    3. I have contacted the insurer who I had coverage during my initial claim. Since 2007, they upgraded their computer system and no longer have a record of my original claim, so even if I wanted to provide proof, I couldn't. They also stated that had the claim been sent to them back then, costs would have been covered 100%, with no out-of-pocket expense to me

    I apologize for all the questions. I was able to obtain a copy of Chapter 676A - Uniform Debt-Management Service Act and will begin to read it shortly. But with me being a "foreigner", recognizing that I have limited time to deal with this claim and short of contacting a lawyer in the US (which I certainly cannot afford), I don't know where else to turn.

    Many thanks in advance, Christina J., Toronto, Ontario, Canada

    0 Votes

    • BA
      Apr, 2012
      Bill
      The maddening thing about today's US medical billing and insurance is a person can speak to hospital's billing department and ask if the hospital accepts "Insurance ABC." The billing person will say yes or no, and if the billing person says "yes," a reasonable person assumes yes means yes: All services are covered subject to a co-pay or deductible. But yes does not mean yes when it comes to hospitals and insurance billing. Let us say the hospital contracts with a third-party laboratory that processes its blood tests, and a physicians group whose employees analyze x-rays and other radiology results. These contractors wander the hospital looking like employees, but are not. Their employers may or may not accept the same insurance the hospital accepts. Later, the patient is surprised by bills from the lab and radiologists not covered by their insurance. The worst part about this is patients have no notice an unknown portion of their stay in the hospital will not be covered by their insurance. Nor can patients chose which contractors care for them.

      You also touched on incompetent medical billing. When a medical billing department misses an insurance company's deadline, it expects the patient to pay. This strikes me as unfair. If a doctor tells you in advance, "My office is probably going to goof-up the billing. Do you still want me to treat you?" You would probably say, "No, thanks, I will wait for a doctor who hires competent billing people." But that is not what happened here. Your reasonable expectation was all professionals treating you would take reasonable care in processing your insurance claim. But they failed, and now demand you pay for their incompetence.

      Obviously, my rant above has nothing to do with part of your question concerning your being a non-US resident. That is because I believe whether you were a resident of Toronto, New York, San Francisco, or Las Vegas, you would face the same issues and ask the same questions today.

      The statute of limitations question is complex across state lines, and is even worse when crossing an international border. I assume the doctor is a Nevada resident. The doctor has two options if you two do not reach a settlement for the debt:
      1. File a lawsuit against you in a Nevada small claims court. (I presume the amount demanded is less than $5,000.) The doctor wins and is awarded a Nevada judgment. The doctor must then hire a Canadian lawyer in your province to domesticate the debt, and then try to collect it from you. The smaller the amount, the less likely this would happen.
      2. File an action against you in Canada. This is also unlikely given the expenses involved..

      My advice? Offer the doctor's collection agent a small settlement amount. Maybe 10 cents on the dollar. If the collection agent is reasonable and know he or she is working with non-US resident, he or she will jump at the deal. If the collection agent is not reasonable, send a cease communications letter to the collection agent, which will end that collection agent's contacts with you.

      0 Votes

  • KH
    Apr, 2012
    Ken
    I just received a notice of Execution After Judgment in the mail. It states that I was served back in 2008, I don't rember being served. On my credit report it shows that they charged off the debt. This is a law firm handeling the collection. I haven't used that card nor made a payment to them in 5 1/2 years or so. My questions are: Is there a SOL in the state of Nevada? Can they legally attach my wages and lien my home (which I bought and homesteaded in 2010) for an account that shows charged off?
    0 Votes

    • BA
      Apr, 2012
      Bill
      First, talk to a Nevada lawyer who has civil litigation experience. Your comment, "It states that I was served back in 2008, I don't rember being served," gives me pause. If I understand Nevada Rules of Civil Procedure Rule 4 correctly, service of process of a summons must be done personally. Most people remember a process server plunking a summons in their hands. If you were never served, then the plaintiff did not follow Nevada's rules, which require effective notice of an action. Consult with a Nevada lawyer who has civil procedure experience and ask him or her about vacating the judgment.

      Second, regarding your other questions, yes, Nevada has a statute of limitations for debt, which we discuss in the original answer above. Nevada allows wage garnishment and liens for judgment creditors.
      0 Votes

  • AC
    Apr, 2012
    Amy
    In January 2012 I moved. The prior apartment complex that I lived in sent me to collections for $200. I never once received any bills stating that I owed money. I would have had no problem paying them. As soon as I saw the collection notice on my credit report I paid them. Now because of this by credit score went down by 109 points. Can I be sent to collections without having received any bill?
    0 Votes

    • BA
      Apr, 2012
      Bill
      The situation you described is unfair, but not illegal if you had liability for the amount owed. So, the short answer to your question is, "Yes."

      My advice? File a dispute with each of the credit reporting agencies that are publishing this derogatory.
      0 Votes