New Jersey’s Debt Collection Laws: A Comprehensive Overview

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Debt collection is an important part of the financial ecosystem. It ensures the timely recouping of debts, maintaining the financial health of businesses and individuals alike. People in debt typically compare these two options bankruptcy vs debt settlement.


However, the process of debt collection must adhere to certain laws to ensure fairness and prevent harassment. This article will provide a detailed understanding of New Jersey’s debt collection laws.

The Fair Debt Collection Practices Act (FDCPA)

Before diving into New Jersey-specific laws, it’s crucial to understand the overarching federal legislation that governs debt collection across the United States – the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts from consumers.

New Jersey Fair Debt Collection Practices Act

New Jersey's Debt Collection Laws: A Comprehensive Overview

In addition to the FDCPA, New Jersey has its own debt collection law, known as the New Jersey Fair Debt Collection Practices Act (NJFDCPA). The NJFDCPA further reinforces federal laws and provides additional protections to New Jersey residents.

Key Provisions of New Jersey Debt Collection Laws

  1. Communication: Under the NJFDCPA, debt collectors cannot call before 8:00 am or after 9:00 pm. If a debtor has hired an attorney, all communication must be directed to the lawyer instead of the debtor.
  2. Harassment: Debt collectors cannot harass or abuse debtors. They are prohibited from using threats of violence, obscene language, or making repeated phone calls intended to annoy or harass.
  3. False Representation: Debt collectors cannot use false, deceptive, or misleading tactics in their attempts to collect a debt. This includes misrepresenting the amount owed, falsely claiming to be an attorney, or threatening legal action that they do not intend to take.
  4. Validation of Debts: Upon request, debt collectors must provide validation of the debt, including the name of the creditor and the amount owed.

Statute of Limitations

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New Jersey laws limit the amount of time a creditor can collect on a debt. For most types of debt, including credit card debt and medical debt, the statute of limitations is six years. For auto loan debt, the statute of limitations is four years.

It’s important to note that making a payment or acknowledging the debt in writing can reset the clock on the statute of limitations.

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Wage Garnishment

In New Jersey, wage garnishment is limited to 10% of a debtor’s net take-home pay. However, certain types of income, like social security or disability benefits, are exempt from garnishment.

Consequences of Not Paying a Debt

If a debtor fails to pay a debt, the creditor may file a lawsuit. If a judgment is obtained, the creditor can potentially seize property or garnish wages. However, New Jersey law exempts certain types of property from seizure.


Understanding New Jersey’s debt collection laws is crucial for both debtors and creditors. These laws strike a balance between allowing creditors to collect debts owed to them and protecting consumers from harassment and unfair practices. If you’re dealing with debt collection issues, it’s advisable to consult with a legal professional who can guide you based on your specific circumstances. Remember, while debt repayment is a legal obligation, you also have rights that protect you from unfair practices.


New Jersey's Debt Collection Laws: A Comprehensive Overview 1

What is the statute of limitations for debt in New Jersey?

In New Jersey, the statute of limitations for most types of debt, including credit card debt and personal loans, is six years. This means that after six years, debt collectors cannot legally sue you to collect the debt.

How does New Jersey law protect consumers from unfair debt collection practices?

New Jersey law protects consumers through the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect a debt.

Can a debt collector garnish wages or bank accounts in New Jersey?

Yes, if a debt collector has obtained a court judgment against you, they can garnish your wages or bank accounts. However, certain types of income, like social security, are generally exempt.

What should I do if I’m contacted by a debt collector in New Jersey?

You should request a written validation notice, which must include the amount of the debt, the name of the creditor, and your rights under the FDCPA. If you do not owe the debt, you can dispute it.

Can a debt collector call me anytime they want in New Jersey?

No, under the FDCPA, a debt collector can only call you between 8 a.m. and 9 p.m. your local time. They are also not allowed to call you at work if they’re told you’re not allowed to receive calls there.

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What can I do if a debt collector violates New Jersey debt collection laws?

If a debt collector violates the law, you can report them to the New Jersey Division of Consumer Affairs and the Federal Trade Commission. You may also be able to sue them in court.

Can a debt collector add interest or fees to my debt in New Jersey?

Yes, but only if the contract that created your debt allows for it or if New Jersey law allows it.

Can a debt be too old to collect in New Jersey?

Yes. If a debt is older than the statute of limitations (six years for most types of debt), a debt collector cannot sue you to collect it. However, they can still try to collect the debt.

Can a debt collector contact my family, friends, or employer about my debt in New Jersey?

No, a debt collector cannot contact anyone else about your debt without your permission, except to find out your address, your home phone number, and where you work.

What happens if I’m sued by a debt collector in New Jersey?

If you’re sued by a debt collector, you’ll receive a summons and complaint. You should respond by the date specified in the summons. If you don’t, the court will likely issue a default judgment against you, which can lead to wage garnishment or bank levies.


  • Assignee: A person or entity to whom a debt or property is legally transferred.
  • Bankruptcy: A legal process that provides relief to individuals or businesses who can’t repay their debts and allows them to start fresh.
  • Collection Agency: A company hired by creditors to pursue payment on debts that consumers have not paid for a prolonged period.
  • Creditor: An individual, bank, or other entity that has lent money or extended credit to another party.
  • Debtor: An individual or entity that owes money or an amount to a creditor.
  • Debt Validation: A debtor’s right to challenge a debt and/or require a creditor to prove the debt’s validity.
  • Exempt Property: Certain property or assets that the law protects from seizure by creditors.
  • Fair Debt Collection Practices Act (FDCPA): A federal law that limits the behavior and actions of third-party debt collectors and protects consumers from abusive collection practices.
  • Garnishment: A legal method creditors use to take money or property from a debtor to satisfy a debt.
  • Judgment: A court’s final determination of the rights and obligations of the parties in a case, including debt cases.
  • Limitation Period: The maximum period of time one can wait before filing a lawsuit, depending on the type of case or claim.
  • Lien: A legal claim or right against property or assets to ensure payment of a debt.
  • Original Creditor: The entity that initially granted the credit or loaned the money that has become a debt.
  • Post-Judgment Interest: The amount of interest that accrues on the judgment amount from the date the judgment was entered by the court until the debt is paid in full.
  • Repossession: The action of retaking possession of property or goods when a debtor fails to pay their debt.
  • Secured Debt: Debt that is backed or secured by collateral to reduce the risk associated with lending.
  • Statute of Limitations: A law that sets out the maximum time that parties have to initiate legal proceedings from the date of an alleged offense.
  • Unsecured Debt: Debt that is not connected to any specific piece of property. It includes things like credit card debt, medical bills, and utility bills.
  • Validation Notice: A notice that a debt collector must send within five days of first contacting the debtor, containing information about the amount of the debt and the creditor.
  • Wage Garnishment: A legal or equitable procedure through which some portion of a person’s earnings is withheld by an employer for the payment of a debt.

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