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Nevada Collection Laws

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Updated: Sep 3, 2014

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Learn the Collections Laws & Statutes of Limitations in Nevada

If you owe debt and reside in Nevada, it’s important to understand your rights and liabilities. It is even more important if a creditor threatens to file a lawsuit against you.

A lender, collection agent or law firm that owns a collection account is a creditor. Nevada law gives creditors several means of collecting delinquent debt. These methods include wage garnishment, account levy, and, in some cases, seizing personal property.

Before a creditor may use these legal tools in Nevada, the creditor must go to court to receive a judgment against you. See the Bills.com article to learn more about this process, and how to fight a lawsuit.

A court will hold a hearing after a creditor files a lawsuit. A hearing may result in a judgment awarded to the creditor. A judgment is a court’s declaration the creditor has the legal right to demand:

The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which tool a judgment-creditor may use depends on the circumstances and Michigan law. We discuss each of these remedies below.

Nevada Wage Garnishment Rules

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.

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

In Nevada, garnishment for child support MUST be given first priority as noted in . 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 , 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 .

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 . The collection of monies by attaching or levying bank accounts is described under Funds transfers.

If you reside in another state, see the Bills.com 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 .

If you reside in another state, see the Bills.com 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:

Account/Type Years Statute
Nevada statutes of limitations. Source: Bills.com
Open Accounts 4*
Written contracts 6
Notes Payable 6
Consumer Lease 4
Warranties 6
Debt-Management Services 4
Nevada and Foreign Judgment 6 NRS 17.150 and 11.190(1)(a)
* Under , 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.

The statute of limitation clock starts when the contract is breached. Typically, this means 30 days after the date of the last full payment.

Collection agents violate the 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)). (See the Bills.com article to learn more.)

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 . Nevada 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 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 lawyer licensed in Nevada and experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure in Nevada. If you cannot afford a lawyer in Nevada, contact or another to find low- and no-cost legal advice.

78 Comments

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  • DA
    May, 2014
    D.
    I broke my lease about 3 years ago when I moved from Reno back to Las Vegas. Now I am trying to move from Las Vegas to San Diego where my parents live so they can help me with my son who was diagnosed with leukemia. I cannot rent an apartment in San Diego because the other balance is on my credit report. I have made <$20K a year and haven't been able to pay. They have added $360ish of their own fees and say they took me to court and are therefore also adding court fees and attorney fees. I called clark county court and yes there was a court case, but it was involuntarily dismissed and I was never served. They are now claiming that they will not settle for anything less than the original balance, but since I already have had 3 years they only gave me an hour to decide if I was going to accept the charges, and then refused to send a settlement offer letter to me. Their decision to not settle was because they've already taken me to court and aren't allowed to settle for less than that original amount. If the case was dismissed are they allowed to refile against me? Are they allowed to charge me the court fees without the judge ruling that I was responsible for it? What recourse do I have to settle the debit? If they were nicer to me they may have gotten me to settle for the original balance... but now? I don't appreciate bullying and don't want to give them anything. Can I go back to the original creditor and have them take back the collection?
    0 Votes

    • BA
      May, 2014
      Bill
      I'm not sure what an involuntary dismissal might be. If the Clark County court told you the case was dismissed with prejudice, then the plaintiff would be prevented from refiling the same case against you. If the dismissal was the plain vanilla variety, then the plaintiff has the right to refile the same case against you.

      You mentioned, "they are not allowed to settle for less than the original amount..." That's a policy and not a Nevada law. Company policies can be changed. This statement is a part of the collection agent's negotiation strategy. Be persistent, explain the amount you are willing to spend is all you have, and their walking away from a deal now is money out of their pocket and wasted time.

      As you point out, smart collection agents adjust their negotiation strategies on the fly to suit the consumer. This one, unfortunately, thinks every consumer needs bullying.

      Some original creditors sell their collection accounts to collection agents. Other creditors hire collection agents for a period of time to collect delinquent accounts. The only way you can find who owns the rights to your account is to call the original creditor and ask. If the accounting people you talk to tell you your account is no longer on their books, it's a good indication the original creditor sold your account.
      0 Votes

    • DA
      May, 2014
      D.
      Nevada Civil Court Procedural Rule 41 states:
      (b) Involuntary Dismissal; Effect. If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not under this rule—except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19—operates as an adjudication on the merits.
      From what I researched adjudication on the merits is a ruling. Does this mean they cannot file again? and If so can they still try to collect the money just not file through the courts? I am just confused as to what to do next. I did also dispute this through the credit bureau. They refused to send me a debt validation (I asked verbally, which my research states this is the same as a written notice) which violates the FCRA/FTC correct?
      0 Votes

    • BA
      May, 2014
      Bill
      Thank you for your research on Nevada Rule 41, which I need to brush-up on.

      Nevada's civil procedure law follows the Federal Rules of Civil Procedure. Nevada courts tend to follow federal courts' interpretations of the FRCP. Regarding the definition, of "adjudication upon the merits," the US Supreme Court decided
      Rule 41(a) makes clear that “an adjudication upon the merits” in Rule 41(b) is the opposite of a dismissal without prejudice—that is, it is a dismissal that prevents refiling of the claim in the same court. That is undoubtedly a necessary condition, but not a sufficient one, for claim-preclusive effect in other courts.
      Semtek Intl Inc. v. Lockheed Martin Corp. 531 U.S. 497 (2001)

      What does this mean in plain language? The plaintiff may not refile the same case against the defendant.

      Just because a case cannot be refiled against you does not mean the derogatory collection account cannot be reported on your credit reports. This derogatory can be reported for 7 years starting at the date of first delinquency.
      0 Votes

  • MB
    May, 2014
    Mike
    I was sued by Amex for 11k. I don't work and the only thing I own of value is my car. Can they take the car? Thanks
    0 Votes

    • BA
      May, 2014
      Bill
      As stated in the article above, the first step your creditor must do is file a lawsuit against you. If it does so and you mount an ineffective defense, the court will award the creditor a judgment. With the judgment in hand, the creditor (now called a judgment-creditor) can use your state's remedies laws to collect the amount stated on the judgment from you.

      You mentioned Nevada. Under Nevada law, a consumer can protect up to $15,000 in vehicle value from execution. If your vehicle is worth $15,000 or less, the judgment-creditor cannot touch your vehicle (NRS § 21.090 (1)(f),(p)). If the vehicle is worth more than $15,000, the judgment creditor can ask your sheriff to seize the vehicle, sell it, give the judgment-creditor a check for $15,000 and you any remaining surplus give you the owner a check for $15,000 and the judgment-creditor a check for any remaining surplus.
      0 Votes

    • MB
      May, 2014
      Mike
      Thank you for the reply. I was sued and there was a judgment against me for the amount owed. I received a "Memorandum of Accounting on Writ of Garnishment" in the mail... In regards to the car: It's value is around 15,200. Based on my interpretation of NRS 21.090(1)(f),(p) IF they were to go after the car they'd (creditor) would only be able to keep any amount ABOVE 15,000 (if the car was sold for 15,200 they could only keep 200). Also does filing for bankruptcy stop any/all garnishment like this? Thanks again!
      0 Votes

    • BA
      May, 2014
      Bill
      Your interpretation of NRS 21.090 is correct. I got it backwards, and will change my earlier comment. Bills.com makes reasonable efforts to publish correct information, but we make mistakes sometimes.

      Filing a bankruptcy petition puts what the law calls a "stay" on all actions against the person filing. The stay stops everyone from collecting from you and foreclosures. But a stay can be temporary. A judgment-creditor or other creditor can file a motion with the bankruptcy court to ask permission to proceed with a foreclosure, wage garnishment, and so on.
      0 Votes

  • KO
    Apr, 2014
    Kristina
    I found an open delinquent account on my credit today from an apartment complex that I rented from in 2007-2008. The account was reported on 10/26/2013. I have not heard about this since 2008. The date showing on my credit shows it was opened on September 18th, 2008 (four months after vacating the property). The last I heard from them was in 2008 when I offered to cover my half of the total owed as long as they would write me off and collect the other half from my roommate who was also on the lease. They told me they would have to get in contact with her before agreeing. I never heard from them again. I have not been notified of this at all and only discovered it while checking my own credit. What are my options here? I am assuming this will stop me from being able to rent.
    0 Votes

    • BA
      May, 2014
      Bill
      Landlords do not share universal policies for renting apartments or houses. Therefore, do not assume any and every application to rent an apartment will be denied automatically. If the date of first delinquency was in 2008, this derogatory will be removed from your credit reports in 2015. Reaching a settlement agreement today would not change the date this derogatory falls off your credit reports.
      0 Votes

  • SR
    Apr, 2014
    S.
    I am being sued by a banking institution for an overdraft from 2010. I currently have not been employed since 2011 and am in the process of fighting for disability. I personally do not have an income, yet my youngest child receives SSI. The only asset I own is an older car valued at about $2,000. Can they garnish my son's SSI since I am the representative payee. Or can they not touch his money?
    0 Votes

  • AC
    Apr, 2014
    Abbey
    I have a repossession on my credit report since 2008. I lost my job and didn't have the means to pay for it. Just recently the creditor keeps adding a negative mark on my credit report EVERY MONTH. I was told I had a judgment against me but I can't find it anywhere in the court in my state. Every month however I see them posting a negative mark. Does the state of NV have a Statute of Limitations and if they file every month to my credit report does that start the time off again? I know they have 7 years and this year will be the 7th year.
    0 Votes

    • BA
      Apr, 2014
      Bill
      I think you have two separate issues here:
      • The repossession. This can be reported on your Equifax, Experian, and TransUnion credit reports for 7 years from date of delinquency. You mentioned 2008. When exactly did the repo occur? Add 7 years to that date, and that is when the repo will fall off from your credit report.
      • The judgment. You mentioned you cannot find a Nevada court with this on file. How did you look? You may not be able to find it online, as some rural Nevada counties do not have Web sites publishing this information. Did you visit your local courthouse in person to see if a judgment is filed in your name there?

      What to do? If no judgment exists, send the consumer credit reporting agencies that publish this information, including Equifax, Experian, or TransUnion, a dispute about your phantom judgment.

      You mentioned Nevada's statute of limitations. Assuming for the sake of argument that a judgment against you really exists, Nevada's statute of limitations for judgments is 6 years. This means the judgment-creditor can use the judgment as a tool to garnish your wages, levy your bank accounts, place a lien on your real property, or ask the sheriff to seize and auction your non-exempt personal property for 6 years from the date the judgment was filed.

      Under the Fair Credit Reporting Act, Equifax, Experian, and TransUnion can report this judgment on your credit reports for the length of time a judgment is valid in a consumer's state, or 7 years, whichever is longer. Therefore, Nevada residents will see judgments reported on their credit reports for 7 years.

      0 Votes