Medical debt and credit reports in New Jersey

The rule in New Jersey

Partial limit

A health care provider or medical debt collector may not report your medical debt to a credit bureau for care received on or after July 22, 2024. A credit bureau may not include paid medical debt, or medical debt under $500, in a credit report, no matter when it was incurred. Any part of a medical debt reported in violation of the law is void. Every collection letter must say in large bold print that the debt has not been reported and that any part reported is void. If a debt was reported and the creditor learns it was paid or is under an insurance appeal, it must ask the credit bureau to delete it.

Who the rule covers: Providers and medical debt collectors (furnishers) for care on or after July 22, 2024; credit bureaus for paid medical debt and medical debt under $500

In effect since: July 22, 2024

It covers both paid and unpaid debt.

Law: N.J.S.A. 56:11-58, 56:11-59(c), 56:11-61(b), 56:11-62(a)

Other limits on collection in New Jersey

Waiting rules

Wait before collections: 120 days after the first bill

Wait before a lawsuit: 120 days after the first bill

A provider or medical debt collector may not take any collection action until 120 days after the first bill was sent and until it has offered you a reasonable payment plan. Collection actions include selling the debt, reporting it to a credit bureau, liens, seizing a bank account or property, suing and wage garnishment. Sending bills and reminders is allowed. At least 30 days before any collection action, it must send you another bill and a notice saying what action it will take and the date, at least 30 days away. While an insurance appeal of the claim is pending and the creditor knows about it, it may not contact you to collect, sue you or send the bill to a collector.

Liens on your home

A lien on your property is a collection action, so it is allowed only after the 120-day wait, a payment plan offer and a 30-day notice.

Wage garnishment

A provider or medical debt collector may not garnish your wages for medical debt if your yearly income is less than 600% of the federal poverty level. General New Jersey limit: a wage execution may take no more than 10% of wages unless income is above 250% of the poverty level.

Selling the debt

A provider may sell medical debt only after a written agreement in which the buyer promises not to report it to a credit bureau, not to use liens, bank seizures, lawsuits or garnishment, and not to otherwise seek payment for the care. A provider may not send a bill to a collector or sell it while it knows an insurance appeal is pending.

Lawsuit rules

Suing is a collection action and is subject to the 120-day wait, payment plan offer and 30-day notice. While a creditor knows an insurance appeal of the claim is pending, it may not sue you or start arbitration. If you accept a reasonable payment plan and keep to it, no collection action may be taken. Accepting a plan does not mean you admit the debt is valid, and you keep all your defenses. The Attorney General enforces this law; the law itself does not give you a separate right to sue over a violation.

Bank account

Seizing a bank account is a collection action covered by the 120-day wait, payment plan offer and 30-day notice rules.

Law: N.J.S.A. 56:11-57 to 56:11-62 (Louisa Carman Medical Debt Relief Act); N.J.S.A. 2A:17-56

Is my debt too old in New Jersey?

A lawsuit on a contract or account must be filed within 6 years.

What can restart the clock

A new promise or acknowledgment counts only if it is in writing and signed by you. A payment of principal or interest keeps whatever effect it has under the law.

Law: N.J.S.A. 2A:14-1, 2A:14-24

A time limit to sue can differ by kind of agreement, and when it starts and what restarts it can differ; a court decides.

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