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January 23, 2020 Collections

Important New Jersey Debt Collection Laws

New Jersey has strict rules regarding the collection of debts from individuals and consumers. As a lender or a business attempting to collect a debt, it is critical that you understand how the state laws impact collection efforts. At Snellings Law, our knowledgeable collections attorneys are here to help you navigate the legal system and collect the debts you are owed. To learn more about the wide range of legal services offered to our clients in need of debt collection services, call or contact our office today.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a federal law that New Jersey has also adopted at the state level and dictates how collections must occur with individual and commercial debtors. Debt collectors are not allowed to use deceptive, unfair, or dishonest practices when collecting a debt. Collections may only take place between 8:00 a.m. and 9:00 p.m., and if the debtor has solicited an attorney all communications must be sent to the lawyer instead of the debtor. A debt collector cannot harass the debtor or use false and misleading representations.

Under the FDCPA, a debt collector is not allowed to tell a debtor that they intend to commence a lawsuit unless they intend to. Utilizing a debt collections attorney is useful in this situation, as a collections attorney is capable of filing a lawsuit on the claim and thereby is not in violation of the state or federal laws. 

New Jersey Debt Collection Statute of Limitations

In addition, a lender only has a certain period of time, known as the statute of limitations, in which to collect on a debt from a debtor. Under New Jersey law, the statute of limitations to collect on auto loan debt is four years. Medical and credit card debt has a six year statute of limitations, and all other types of debt range between four and six years for filing a lawsuit to collect. If a claim is not filed within that time period, the court can throw out the case and bar collections for the debt. An experienced collections attorney understands how the statute of limitations can impact a claim and can ensure timely filing for your case.

Wage Garnishment Laws

New Jersey law allows for the use of wage garnishment in order to collect on a debt. Wage garnishment allows a creditor to contact a debtor’s employer and require that a certain percentage of each paycheck be set aside for the repayment of their debts. Under New Jersey law, wage garnishment is allowed if the debtor makes more than $217.50 per week, with net pay being at least $154.50. A creditor can garnish up to 10% of each paycheck’s gross pay before taxes. However, only one creditor can garnish wages at a time, so if your debtor owes more than one creditor it is important to move quickly in order to secure a wage garnishment order from the courts.

Property Lien Laws

Property liens are also allowed under New Jersey law for debt collection purposes. Liens can be placed on real estate and personal property owned by the debtor within the state. Once a judgment for liens is rendered, they are automatically attached to the debtor’s present and future property located anywhere in the state. Property liens are attached for 20 years or until the lien is paid by the debtor.   

Rules for Levying Bank Accounts

New Jersey also allowed for the levying of bank accounts in order to collect on a debt. A levy allows a creditor to take whatever money is in a debtor’s bank account, subject to certain restrictions, and apply that money to an outstanding balance on a loan. In order to utilize a levy in New Jersey, the court must give the debtor prior notice of the creditor’s intention to levy an account and exempt some portion of the account for the debtor’s personal use. State law provides other specific procedures regarding the use of levies that must be carefully abided by when using this method for debt collection. 

Call or Contact Our Office Now

New Jersey debt collection laws are strict, but they do also provide methods for creditors to collect their unpaid debts. If you have questions regarding the laws for New Jersey debt collection, the experienced collections attorneys at Snellings Law in Parsippany are here to help. Call the office or contact us today to schedule a consultation of your case.