What is the Statute of Limitations on Debt in NJ?

Are you chasing down debtors over old debts? Are you wondering what the New Jersey law says about debt? You need to find a way to collect the amounts owed before the expiry of the statute of limitations.

Once the statute of limitations expires, you cannot use legal means to recover the money. You’re forced to incur the losses or used non-legal means to try and convince the debtor to pay you back.

If you have any existing debtors, keep reading to learn about the statute of limitations on debt in NJ and what you can do to recover the money.

The Statute of Limitations on Debt in NJ

The statute of limitations on debt in NJ is six years according to Section 2A:14-1 of the state’s laws. The statute of limitations applies to all kinds of debt. These include written, oral, promissory, or open.

Once this period lapses, you cannot sue an individual or use force to try and recover the debt.

However, New Jersey debt collection laws don’t imply that the debt is null and void. They only protect the debtor from harassment by the creditor or collection agencies. The debt will only be deemed cleared if:

The debtor pays it
The debtor is declared bankrupt by a court of law
You decide to write it off

The Time Factor

Time is incredibly essential in executing statutes of limitations. You need to know when the clock started and whether six years have elapsed.

In this case, the clock starts on the last day of inactivity on the account. This refers to the last day the debtor took any of the following actions.

They made a payment towards the debt
They acknowledged the debt and agreed to pay
They made arrangements to pay

Once the debtor takes any of these actions, the clock restarts. You need to have an accurate recollection of these actions. Find proof that the debtor made a partial payment or acknowledged to pay.

You can look for receipts, texts, emails, or any other form of communication that can act as evidence. If you get any form of evidence, go to court, sue the debtor, and use legal means to recover the debt.

What to Do After the Period Passes

Once the statute of limitations on debt in NJ expires, you cannot use legal means to recover the debt. However, all isn’t lost. You can take measures to do one of the following:

Get the debtor to pay
Get the debtor to restart the clock

Send texts and emails asking the debtor to pay you back partially or in full. You can also use a debt collection agency to contact the debtor. If the debtor acknowledges the debt, they restart the clock and create a loophole for you to pursue them in court.

However, note that debtors can use legal means to stop you from contacting them. The Fair Debt Collection Practices Act protects debtors from harassment by creditors.

The law allows debtors to send a cease and desist letter to you or your collection agency. This prevents you from using any means to contact them about the debt after the lapse of the six years.

Use subtle means of communication to avoid angering the debtor and causing them to take legal action against you.

Guard Yourself Against Bad Debt

Take action on a non-performing debt before the expiry of the statute of limitations on debt in NJ. Once the period lapses, the chances of losing your money are high.