How Debt Collection Laws In New Jersey Protect You From Harassment

An unexpected medical condition, losing your job, or bad financial decisions can all lead to you being late or entirely missing bill payments. And now you are suddenly getting calls from debt collectors - you must learn how to respond to them and what your rights are in the process of debt collection in the state of New Jersey.

Fair Debt Collection Practices Act In New Jersey

The FDCPA is a federal law that regulates what debt collectors can and can't do in their debt collection endeavors. It protects New Jersey consumers from harassment, abuse, and deception regarding debt collection. 

The FDCPA governs the behavior of debt collectors using the following guidelines:

  • Collectors can't call you before 8 AM or after 9 PM.
  • If you inform them that you have an attorney who represents you, they can't directly contact you anymore, and they must communicate with you through your attorney.
  • Collection agencies may contact your friends, family, or neighbors for your contact information but cannot disclose anything about your debt.
  • If you send them a written request to stop contact, they must cease all contact with you. (Although collectors can still file a lawsuit or garnish your wage.)
  • Debt collectors can't pretend to work for the government or deceive you into thinking they are someone they are not. They also cannot threaten to harm you or have you arrested.
  • Debt collectors can't publicly shame you and coerce you into paying any money you might owe. They can only discuss your debt with you, your attorney, and your spouse.

How You Should Respond To Collection Calls

There is no need to be intimidated or overwhelmed by collection calls. Knowing your rights lets, you quickly tell when a debt collector is using illegal methods to get money out of you. When a debt collector calls, you can avoid making a mistake that could put you in legal or financial trouble if you know what to do and say.

  1. The first thing to do when you start getting calls from collectors is to record your conversations. If you have proof of communication, you can use it later down the line when disputing charges. Make a note of the name of the collection agency, the name of the agent who called, at what times of the day they called, everything you discussed, and any request they made.
  2. Do not speak in a way that confirms or admits that the debt they are discussing is yours. First, you need to make sure to validate that the debt is yours. You do this by requesting a debt validation letter from the collection agency. Collection agencies frequently make mistakes, so it is critical to confirm that the debt is the correct amount, that it genuinely belongs to you, and that it has not expired beyond the legal time limit for which the creditor can hold it against you. The only way to verify this is in writing.
  3. Don't disclose any personal or financial information. Collectors will want to know everything they can about your finances, but you should not reveal anything until you have received confirmation of your debt. This will prevent you from assuming responsibility for any debts before determining whether or not they are legally yours.

If you legally owe the debt and are obligated to pay it, the collection agency may be able to negotiate a payment plan with you. Some will settle for less than what you owe, while others will attempt to negotiate payment terms that you can afford.

Wage Garnishment In New Jersey

Wage garnishments allow creditors to deduct money directly from your paychecks. It is commonly used to collect delinquent debts, making it harder for you to pay for necessities such as groceries and rent. 

Different states have their wage garnishment laws. In New Jersey, creditors are allowed to garnish your wages to collect on a debt, but first, they must file a lawsuit and get a money judgment against you.

After getting a judgment, the creditor must send a 'notice of application' to inform you of the garnishment. They must also send a service certification to the court, proving that they informed you of the wage garnishment. 

After being informed through the mail, you have 13 days to object to the wage garnishment and 10 days if you were notified in person. To object to wage garnishment, you first need to provide a "Certification in Objection to Wage Garnishment," which will contain all documents proving why you want to stop or reduce the garnishment. You also need to provide a certification of service confirming that you informed all other parties involved about your objection.

In New Jersey, a creditor can garnish whatever is the lowest amount from the following list - 

  • Whatever is left of your weekly income after subtracting $217.50 from it.
  • 25% of your disposable income for the week
  • 10% of your income (if your income is within 250% of the federal poverty level for a household of your size)

How long does a creditor or debt collector have in New Jersey before they can file a lawsuit?

The amount of time creditors have before they can file a lawsuit against you is known as the statute of limitations. New Jersey statute of limitations ranges from 6 to 4 years, depending on the type of debt. The statute of limitations for credit card, medical, mortgage, and state tax debt is 6 years, and for a car loan debt, it is 4 years. 

After the statute of limitations for a particular debt is up, creditors can still contact you but can't sue you anymore. But if you make even one payment towards any debt, the time limit resets, and it is no longer ''time-barred.'' To figure out if one of your debts is time-barred, you can check when the last payment was made towards it and see if it has crossed the statute of limitations for that type of debt.

How You Can Find Debt Relief In New Jersey

It's tough to keep up with monthly bills and save for an emergency fund, let alone make the minimum monthly credit card payments. Getting out of debt is difficult, especially when living paycheck to paycheck. Luckily there are ways to get out of such a financial situation. Debt consolidation can be a good option if you have multiple high-interest unsecured debts, like payday loans and credit cards. You can also negotiate a debt settlement and pay your debt off for much less than you owe.

There is also the option to refinance your debts to a lower interest rate which can help you pay them off faster and pay less interest over time. Look for opportunities to refinance your car loan, mortgage, student loan, etc. Go through the refinance options and choose the one that best suits your need.

The Bottom Line

Federal and state debt collection laws protect you from being harassed by collectors if your debt goes into collections in New Jersey. Being in debt is stressful, and you must be aware of your rights when debt collectors regularly contact you. The FDCPA regulates debt collection in all states, including New Jersey, so keep its guidelines and the above tips in mind when responding to collectors. Always remember that you have several options to manage your debt, whether you choose to make extra payments towards your debts or consolidate/settle them.

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