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 Served Summons and Complaint 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 Nevada law. We discuss each of these remedies below.
Receiving collection calls is unpleasant, whether from the original creditor or from collection agency. Call 800-998-7497 to speak with a Money Coach and discuss what to say and not to say in a phone call with a debt collector, and also what kind of financial plan you need to avoid this happening again.
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 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.
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.
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.
Each state has its own statute of limitations for consumer-related issues. Here are some of Nevada’s statutes of limitations:
|Open Accounts||4*||NRS 11.190 (2)|
|Written contracts||6||NRS 11.190(1)(b)|
|Notes Payable||6||NRS 104.3118|
|Consumer Lease||4||NRS 104A.2506|
|Debt-Management Services||4||NRS 676A.780|
|Nevada and Foreign Judgment||6||NRS 17.150 and 11.190(1)(a)|
|* 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.|
The statute of limitation clock starts when the contract is breached. Typically, this means 30 days after the date of the last full payment.
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 Nevada Community Property 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.
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.
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 Nevada Legal Services or another Nevada pro bono program to find low- and no-cost legal advice.