Debt Collection

What do I do if I have debt collectors contacting me?

The answer is that it depends.  Debt collectors are prohibited from engaging in abuse and harassment to get you to pay a debt.  You might also be exempt from collection – which means that even if you have a judgment against you, the debt collector might not actually be able to force you to pay the judgment.  If you are not exempt, you might want to try to enter a payment plan to try to avoid a lawsuit.  Ultimately, though, your creditor or debt collector must sue you in order to force you to pay any debt.  Of course, the creditor or debt collector can report the delinquent debt to credit reporting agencies before filing suit.  Debt collectors must still follow federal rules regarding how they try to collect debts and you have rights under certain federal laws like the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.  

For more information about abusive debt collection practices and how to stop them, visit our page on Fair Debt Collection Practices.  For more information about the duties of credit reporting agencies, please visit our page about Credit Reporting.

For more information on what to do if you have been sued or have a judgment against you, please see the information below.

What do I do if I have received a Summons and Complaint about a debt?

If you do not believe you owe the debt or disagree with the amount, you need to file an Answer within 20 days of receiving the Summons and Complaint. The Answer must state why you do not owe the debt and any affirmative defenses you believe you have to the debt. If you believe the creditor or debt collection agency did something illegal in attempting to collect the debt, you may also want to file a counterclaim against the creditor or debt collector when you file your answer. If you do not file an answer or go to the hearing, the creditor can get a default judgment against you. A judgment remains in effect in Nevada for six years, and can be renewed forever.

If you do owe the debt and have no other defenses, you can choose not to answer the complaint. A default judgment will be entered against you, but you will likely incur less attorney’s fees than if you contested the Complaint. You may wish to contact the creditor or the creditor’s attorney directly in an attempt to negotiate a payment plan.  They are not obligated to arrange payments, however, it may prevent further collection actions if payments are being made. Alternatively, you may wish to consider the various forms of relief available to you under the Bankruptcy Act.  See our page with more information about Bankruptcy.  You may file a Chapter 13 Bankruptcy action to establish a wage-earner plan where in you pay your creditors on a reduced basis.  You may also consider a discharge of all your debts by filing a Chapter 7 Bankruptcy.  In either of these proceedings, court actions and executions of judgments are stayed while the bankruptcy action is proceeding.  

What do I do if I have been served with a Judgment?

Even if you have a judgment against you, your creditor must still try to garnish your wages or attach your property in order to collect the amount of the judgment. Not all property is available for the creditor to take. Some of your wages, money in a bank account, or other property is exempt from execution.

What property is exempt in Nevada?

Chapter 21 of the Nevada Revised Statutes lists property that is exempt from execution in Nevada. NRS 21.090. Exempt income includes:

  • Social Security, SSI, SSD
  • Public assistance such as TANF or food stamps
  • Unemployment benefits
  • 75% of your disposable earnings or 81% if your disposable earnings are $770 per week or less
  • $10,000 in a bank account
  • Veteran’s Benefits, Railroad Retirement benefits, PERS (Public Employee’s Retirement System), or FERS (Federal Employee Retirement System), or CSRS (Civil Servant Retirement System)
  • Worker’s Compensation
  • Child support or alimony income
  • Payments received from a wrongful death judgment or settlement

Exempt property includes:

  • Up to $550,000 in equity in a homestead (see Homesteading Your Home below for more information)
  • Jewelry, musical instruments, or other keepsakes not to exceed $5,000
  • Necessary household goods not to exceed $12,000
  • Farm equipment, trucks, stock, tools and sup-plies not to exceed $4,500
  • Tools, instruments, and materials of trade not to exceed $10,000
  • One vehicle with less than $15,000 in equity

How do I claim an exemption?

You will receive notice of a garnishment or attachment and you have 10 days to file a claim of exemption with the court. A copy of the claim must be served upon the Sheriff (or Constable), your employer (if you are being garnished) and the judgment creditor (the party trying to collect). When the claim is served, the Sheriff (or Constable) holds the property and the judgment creditor must file an objection within 8 days.  The court must then hold a hearing within 7 days to determine whether you have an exemption.  If no objection filed, then Sheriff or Constable must wait 9 days before returning your property.

Homesteading Your Home

Why do I need to homestead?

If someone sues you and gets a judgment (judgment creditor), your home could be sold to pay off the judgment.   This could happen if you fail to pay a credit card or get into an expensive traffic accident.  The judgment creditor can seize your home and sell it to pay off the judgment.  Filing a homestead declaration stops this from happening.

What is a homestead?

Nevada homestead law protects your home from most creditors.  By filing a declaration of homestead, you will protect up to $550,000 in equity in your residence home.  A homestead protects your home from creditors.

Do I qualify?

You can file a homestead on the home, condominium, or mobile home that you live in.  You must own the land upon which your home sits or own the condominium.

If you do not own the land, only the structure on the land, you do not need to homestead.  Nevada law still protects up to $550,000 in equity.  NRS 21.090(1)(m).

Allodial Title?

Allodial Title is no longer available in Nevada.  If you have established Allodial Title, you must have done so prior to June 13, 2005.  For further information, contact an attorney.

How much does a homestead protect?

A homestead protects up to $550,000 in equity in your residence home.  You can still file a homestead if you have more than $550,000 in equity.  In this case, the home may be sold and the $550,000, or any amount remaining after the sale and satisfaction of the debt, will be returned to you.  NRS 115.050.

If the judgment is for medical bills, you do NOT need to file a homestead and the $550,000 limit does not apply.  All of your equity is protected during your lifetime, the lifetime of your spouse and until your minor child turns 18.  If your child is disabled, then this exemption applies for your child’s life.  A joint tenant is also included in this exemption, as long as the joint tenant was on the title when the judgment for medical bills was entered. NRS 21.095.

Does a homestead protect me from all debts?

No, the homestead will not protect you from debts used to purchase or improve your residence home.  The homestead will not protect your home from unpaid bills or damages resulting from work done on your home, like landscaping and painting.

Finally, homestead does not protect your home from unpaid tax bills or Medicaid liens, HOA dues, federal taxes and other federal claims.

I have a homestead already.Do I need to re-file?

No.  Even if you filed before July 1, 2007, when the exemption amount was only $350,000, Nevada law amends your homestead to include the greater amount of $550,000.  NRS 115.010(6).

Although Nevada law allows a homestead to continue after the death of owner, it is a good idea to re-file a homestead whenever:

  • You or your spouse die;
  • You divorce your spouse;
  • You get married.

Record the form:

You record your Declaration of Homestead by taking or mailing the form to the county recorder’s office in the county in which you live.

You must pay a recording fee.  Contact your local recorder’s office for fee information.  The recorder’s office will record your Declaration of Homestead and return the form to you.  Recording the homestead is constructive notice to any judgment creditor that up to $550,000 in equity is protected.

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