Understanding Medical Debt Statute of Limitations in New Jersey

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Medical debt can be a significant burden for many individuals, and understanding the legal framework surrounding it is crucial. In New Jersey, the statute of limitations (SOL) for medical debt is defined by state law, which dictates how long creditors have to initiate legal action to collect unpaid medical bills.

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Statute of Limitations Overview

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According to New Jersey Revised Statutes §2A:14-1, the statute of limitations for medical debt is six years. This period begins from the date of the last payment or any activity related to the debt, such as acknowledging the debt or making arrangements to pay it. If a debtor has not made any payments or acknowledged the debt within this timeframe, creditors can no longer sue for collection.

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Key Points on Medical Debt SOL

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• Start Date: The clock on the statute of limitations begins with the last activity on the account. This includes:
  • Making a payment
  • Acknowledging the debt
  • Setting up a payment plan.

• Consequences of Expiration: Once the six-year period has expired, creditors cannot pursue legal action to recover the debt. However, this does not mean that the debt is erased; it simply means that legal avenues are no longer available to collect it.

• Impact of Acknowledgment: If a debtor acknowledges their medical debt or makes a partial payment after the six-year period has begun, this can reset the statute of limitations clock, giving creditors another six years to act.

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Read: Medical Debt SOL: Statute of Limitations in New Mexico

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Recent Legislative Changes

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In July 2024, New Jersey passed the Louisa Carman Medical Debt Relief Act, which introduces several protections for consumers facing medical debt. Key provisions include:

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• A 120-day waiting period after the first bill before creditors can initiate collection actions.
• Prohibition against reporting unpaid medical debts under certain conditions to consumer reporting agencies.
• Restrictions on garnishing wages for patients with incomes below 600% of the federal poverty level.

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These changes aim to provide relief and prevent aggressive collection practices that can exacerbate financial hardship.

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Understanding the statute of limitations on medical debt in New Jersey is essential for both consumers and creditors. With a six-year limit on legal actions for unpaid medical bills and recent legislative changes aimed at protecting consumers, individuals facing medical debt should be aware of their rights and options. If you find yourself in a situation involving medical debt, it may be beneficial to consult with a legal professional who specializes in consumer rights and debt collection practices.

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Read: Medical Debt SOL: Statute of Limitations in New York