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FEB 06, 2013

Nevada Collection Laws

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

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Bill's Answer: Answered by Mark Cappel

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.

Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact the debtor's employer and require the employer to deduct a certain portion of the debtor's wages each pay period and send the money to the creditor. However, several states, including Texas, Pennsylvania, North Carolina, and South Carolina, do not allow wage garnishment for the enforcement of most judgments. In several other states, such as New Hampshire, wage garnishment is not the "preferred" method of judgment enforcement because, although possible, it is a tedious and time consuming process for creditors.

In most states, creditors are allowed to garnish between 10% and 25% of your wages, with the percentage allowed being determined by each state.

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law. 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.

If you reside in another state, see the Bills.com Wage Garnishment article to learn more.

Levy Bank Accounts

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

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.

Statute of Limitations

Each state has its own statute of limitations. Under Nevada state law, there are several statutes of limitations:

  • Notes Payable (credit cards) NRS 104.3118: Statute of limitations is 6 years.
  • Consumer Lease NRS 104A.2506: Statute of limitations is 4 years.
  • Warranties NRS 116.4116: Statute of limitations is 6 years.
  • Debt-Management Services, (effective July 1, 2010), NRS 676A.780: Statute of limitations is 4 years.

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

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Comments (34)


James C.
Las Vegas, NV  |  June 26, 2012
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?
Bills.com
June 27, 2012
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.
Bonnie R.
Las Vegas, NV  |  April 16, 2012
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!
Bills.com
April 16, 2012
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.
Christina J.
April 13, 2012
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

Bills.com
April 16, 2012
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.

Ken H.
Pahrump, NV  |  April 10, 2012
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?
Bills.com
April 11, 2012
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.
Amy C.
Las Vegas, NV  |  April 09, 2012
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?
Bills.com
April 10, 2012
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.
Julia C.
Smyrna, DE  |  March 13, 2012
A friend of mine lives in Las Vegas. He has severe medical issues due to a serious car accident, he goes to doctors frequently. He says he receives no bills from the doctors as "they have no time to collect, they take co-pay and everything else goes to a collection agency". His credit score is horrible due to this process! Can SOMEONE please help me? I'm in Delaware and don't know what Nevada laws are, if people are taking advantage of him, or if he's mistaken. Thank you!
Bills.com
March 14, 2012
Your friend's explanation does not seem plausible. Every medical office he visits neglects to send him a statement of charges? Nevada's collections laws are not unusual, and it would surprise me that every medical office would shuttle your friend's account to a collections agent immediately.
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Julia C.
Smyrna, DE  |  March 15, 2012
Thank you- I am trying to get him to give me the doctors contact information so I can call them directly, but that's not easy. He says his credit rating is terrible due to this (I didn't think unpaid medical bills counted toward credit, they didn't in NY) He's alone out there and I'd hate to think he's being taken advantage of. THANK YOU!
Dawn G.
Las Vegas, NV  |  February 19, 2012
I had a medical issue when I was 16 years old. At the time, my parents did not have health insurance. As soon as I turned 18 years old I began receiving numerous medical bills from collection agencies. I have had a very hard time trying to establish my credit and finances. For the last 8 years I have been paying off these medical bills. I am now down to one agency 'Grant Weber'. I have two accounts with them, the total was originally about $6000, and with interest, the total try were trying to collect was about $9000. I have been paying them monthly for the last 6 years non-stop. In this time, they have never sent me a current statement, or any type of receipt. The only receipt that I have is with my bank statements. I have a bad feeling that I am getting ripped off here. (Did I mention I was stupid enough to give them my bank acct info, so they do automatic withdraws each month?) I am feeling like this is never going to end! Is there anything I can do to get rid of them? The interest rate is ridiculously high, and with the actual date of services being more than 8 years ago, I probably would have been better off if I never paid them a dime. My credit was already ruined by this... Any suggestions? I am losing my mind here!
Bills.com
February 19, 2012
I am going to address three separate issues you raised:
  1. Accounting questions you have about your debt
  2. Options for resolving the debt
  3. Your damaged credit

Accounting: A good first step is to contact Grant and Weber and request a statement, so you can see what they say you owe and whether your payments have been applied properly. The contact number for Grant Weber that I found when I did an online search is 1-800-333-1656. If you have an account number, have it ready.

Debt Relief Options: If you stop paying the debt, you could be sued and face a wage garnishment or bank levy. Perhaps you can try offering a lump sum as a way to settle the debt.

Credit Repair:You can repair your damaged credit on your own, for free, but it makes sense to prioritize paying off Grant and Weber, before focusing on credit repair. You can also take basic steps to improve your credit score.

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Dawn G.
Las Vegas, NV  |  February 21, 2012
I can't believe it, I asked a real question and received a real answer almost immediately! You are amazing! Thank you for providing a great service!
Debra K.
February 15, 2012
We rented a home in January 2011 and moved out due to the dangerous conditions of the steps on the side of the front porch. They were not built to code and caused a serious injury when I fell from them in August of 2011. When we moved out, we requested that the landlord use our deposit as out last month's rent. They refused and took us to small claims court. The judge's decision was fair, and we ended up owing them less than a full month's rent, a total of approximately $1200. In court, the landlords agreed to allow us to make monthly payments of $200 until the debt was paid in full. We have made those payments each month. To date, we have made 3 payments, totaling $600, so have approximately $600 left that we owe them. Today, my husband received a notice that his wages will be garnished for almost $900 to settle this debt. Can you please help me understand how this works? Our payment agreement was made in court and agreed to by both the landlords and the judge, so how can his wages be garnished for more than we actually owe them? Thanks very much! DKP
Bills.com
February 16, 2012
This strikes me as unfair also. Consult with a lawyer immediately to help you file a exemption for the garnishment. If you cannot afford a lawyer and live in southern Nevada, see the Legal Aid Center of Southern Nevada Web site. If you live elsewhere in Nevada, see the Nevada Legal Services Web site.
Ericka V.
Las Vegas, NV  |  January 21, 2012
Back in August, My husband contacted a collection agency about a debt, and if they would agree to a payment agreement. And upon a agreement if they would write state it on paper. They refused said it was against their policy. They amount they wanted us to pay was $430 for 10 months cause they prefer 10 payments. No agreement at that time was made. Then in Oct we were served court papers. I contacted them, was told to talk to the legal dept. Left a message. The woman who contacted me, was rude and would not allow me to talk. She stated about 10 Payments of like 430.00, I advised her that I could not pay that amount, as i have a family and other bills to pay. She became arguementive and told me it was not her job the figure out my budget. When I asked her to not speak to me in that manner, she hung up on me. Within 3 days I went into their office and made a 50.00 Payment and continued to do so once a month. I went just Jan 19 and they refused payment said the a exection was out. When asked why since I have been paying the agent said not the amount we want, so we will garnish you. Is there anything I can do?
Bills.com
January 22, 2012
You were smart to insist on a written contract before starting a payment plan. It is ridiculous for a collection agent or original creditor to expect a consumer to agree to a spoken contract and state that it is "policy" to not reduce a settlement contract to writing.

You mentioned Nevada. Consult with a Nevada lawyer who has consumer law experience, and bring all of the documents, letters, and contracts you have to your meeting with your lawyer to learn more about your options for negotiating a settlement.
Buster H.
Las Vegas, NV  |  January 09, 2012
I have a couple collections on my credit report over 4 years old. How do I go about contacting the creditors and telling them to remove this from my report. I believe the law in Nevada allows them to collect for 4 years and they must remove it.
Bills.com
January 10, 2012
I think the Nevada law you refer to is the statute of limitations for a written contract. If so, just because a statute of limitations passes does not mean a creditor may not collect a debt. The passing of a statute of limitations gives a defendant in a lawsuit an affirmative defense, and nothing more. See Statute of Limitations to learn more about this law.

Seven and a half years is how long most derogatory items may appear on a consumer's credit report file. The 7½-year rule has nothing to do with a state's statute of limitations. See the resource Fair Credit Reporting Act to learn more about what can appear on a credit report and for how long.
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