Nevada Collection Laws

Nevada Collection Laws
IN THIS ARTICLE:
  • Examine what kind of collections can occur when you live in Nevada and have a judgment against you.
  • Review Nevada rules for the statute of limitations on debt collection.
  • Consult with an experienced Nevadia attorney.

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 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.

Debt Collectors Calling?

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.

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.

How Big a Bite Can a Creditor Take from Your Paycheck?

In 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:

Account/TypeYearsStatute
Open Accounts4*NRS 11.190 (2)
Written contracts6NRS 11.190(1)(b)
Notes Payable6NRS 104.3118
Consumer Lease4NRS 104A.2506
Warranties6NRS 116.4116
Debt-Management Services4NRS 676A.780
Nevada and Foreign Judgment6NRS 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.

Nevada statutes of limitations. Source: Bills.com

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

Harassed or Abused by a Debt Collector? Take Action/

Collection 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)). (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.

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 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.

115 Comments

PPaula, Aug, 2021

My bank loan thru WestStar CU has been frozen even though no judgement or lein has been awarded or submitted. I asked the bank why and they referred me to the collection agency and a lawer came to the phone and said he is the banks lawyer and its legal becasue my loan said the bank can force any late or owed payments. if that is true then why didnt the bank take the money to catch me up on the bill? I was 3 mo behind when sent to this collection company and never recd anything telling me this fact.

JJoshua Abreu-Rosa, Aug, 2021

Hello Paula,
Thank you for reaching out. I am sorry you are going through this financial stress. Paula, I had reviewed this article and I was not able to answer your question directly. https://bankruptcylawvegas.com/nevada-debt-collection-laws-the-fair-debt-collection-practices-act/ I was curious did you get a chance to ask the bank or collector this question? Also, do you still have a copy of your terms and conditions. There might be something to help explain these recent events. I know that if I miss a payment on my home loan the terms have expressed they can freeze the account and not accept payment unless I make up the payment plus more. I thinking you might have the same situation.

Furthermore, if you are dealing with revolving credit you might want to check out our affiliate Freedom Debt Relief. They provide a wealth of options for those having issues making on-time payments. If you would like to learn more about them check out our website Bills.com or call them directly at 800-852-1431.

Regards, Josh

MMichael Farley, Feb, 2021

In 2008, when the economy crashed, I lost my home, boat, and motorcycle. I was also unable to make the credit card payments, partly due to the fact that when they saw I was behind in my mortgage payment, they upped my interest rate to 34.99 percent, which made my minimum payment more than double. So now 13 years later, in 2021, Wells Fargo Bank is trying to collect a credit card debt of $10,800, which they claim has climbed to $29,000, and they are threatening to take me to court for the $29,000. They also claim that my debt didn't default until 2018. Is this legal? Can they do this to me? Thank you, Mike.

JJoshua Abreu-Rosa, Aug, 2021

Hello Michael Farley, 

Thank you for reaching out regarding your Wells Fargo account. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

According to NRS 649.020, it appears that Wells Fargo is considered a Debt Purchaser. Purchaser may not be obligated to the statute of limitations.
 

You mentioned in the previous correspondence Wells Fargo threatened litigation. According to FDCPA, they are mandated to follow through. If not it causes them issues and is considered an unlawful threat. 

I would recommend seeking an attorney to get accurate information regarding your questions. 

Regards, Josh 

JJonathan Weddle, Feb, 2021

I have an outstanding balance from an apartment it will be 6 years in July of this year. Should I pay them since its impacting my ability to rent? or should I just tough it out for the next few months?

JJoshua Abreu-Rosa, Aug, 2021

Hello Jonathan Weddle. 

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

According to this article, lease debt has a statute of limitations of four years. Meaning any third-party collector can not pursue litigation. If they do you should file a response to the court that the third-party collector is out of the statute of limitation. The court will not determine this. You will need to inform them. 

In addition, what do expect to happen if you do wait it out? Please let us know so we may assist you further. 

Regards, Josh 

TTonya, Nov, 2020

I have an outstanding debt for an ambulance ride from when I resided in Nevada 4 yrs ago (Feb 2016). This should have been covered by my insurance but was somehow overlooked and has just now popped up on my pristine credit report! I now live in TN. I’m wondering what the statute of limitations is on this debt and if it would be Nevada’s statute or Tennessee’s?

DDaniel Cohen, Nov, 2020

Tonya, only a lawyer can provide legal advice. I am not a lawyer. I will share some information with you, but it is not legal advice,

I believe that Nevada law would apply. Nevada's statute of limitations for debt on a written contract is 6 years. It so happens that it is also 6 years in Tennessee. SOL issues can be complicated. That means until 6 years have passed from the date of default, the SOL can't be claimed as a defense.

There are acts that a person can take which extend the time on the SOL, by stopping the clock running for a period of time. Some states say you're unavailable when you leave the state. The statute of limitations clock pauses when you're unavailable for service of process. This pause is called “tolling” by lawyers. I am not saying the SOL is tolled in your case, but it is possible.

MMisty, Nov, 2020

I had an auto loan from 2015 but volunteered gave it back in 2017 it has been charged off my credit report for 2 years. And the debt was sold to 2 different agencies then charged off and now a 3rd agency Is suing me for the balance owed.

DDaniel Cohen, Nov, 2020

Misty, I am not an attorney, so please review the information I share but do not consider it legal advice.

The statute of limitations on debt for a written contract in Nevada is 6 years. If you defaulted on the loan when you returned the car voluntarily in 2015, then the statute of limitations has not run out. The collector can sue you and will likely win a judgment against you.

Do you know what the car sold for at auction? Do you have a clear understanding of the fees they are adding for the cost of auctioning it or anything else? I advise you seek a free consultation with an attorney, to get a clearer understanding of what you face and what options you have.