|Ronald H. Reynolds|
Submitted by Ronald H. Reynolds, Senior Partner, Reynolds & Associates
Published by The National List of Attorneys
Ronald H. Reynolds, a third generation Nevadan, is the senior partner at Reynolds & Associates and has been a practicing attorney for 36 years. He received his Bachelor’s Degree at Brigham Young University and Juris Doctor from Gonzaga University. In his various capacities, he has been active as a speaker at seminars and has authored numerous articles. He specializes in business law, collections, financial institutions and general corporate representation. Mr. Reynolds is an AV rated attorney with Martindale-Hubble and, throughout his career in litigation, has taken part in molding Nevada law in the areas of creditors' and employers’ rights and duties.
Every state has its debt collection nuances, both in law and in practice. If you’re going to be issuing credit or purchasing debt in Nevada, you will find it helpful to get some background on the basic contours of the collection process. Understanding the basics of associated licensing, fees, regulations, and exemptions will help you to better evaluate your investment opportunities and avoid some of the common pratfalls that may make eventual collection a headache. There’s no substitute for consulting with an experienced local attorney, but the following should at least provide you with an overview of some of the basics.
I. Foundational Debt Collection Laws
a. Statutes of Limitations
Any of a number of different statutes of limitations can apply in different collection scenarios. The Nevada statute of limitations on open accounts is four years. NRS 11.190(2)(a). Written contracts, however, are subject to a statute of limitations of six years. NRS 11.190(1)(b). Credit card accounts typically qualify as open accounts, but when backed up by a written application/agreement, or the position that signing the back of the card indicates agreement to the terms and conditions, then the six-year statute may be applicable. Obviously, a certain ambiguity exists as to which statute of limitations applies. Nevada courts will generally follow the 9th Circuit ruling that “if a substantial question exists about which of two conflicting statutes of limitations to apply, the court should apply the longer as a matter of policy,” so a credit card account founded upon a written agreement should qualify for a six-year statute. Marshall v. Kleppe, 637 F. 2d 1217, 1244 (9th Cir. 1980) (citation omitted). Domestic and foreign judgments are also subject to a six-year statute of limitations. NRS 11.190(1)(a).
b. Bad Check Laws and Civil Penalties
In Nevada, intentionally writing a bad check is a criminal act, punishable as either a misdemeanor or felony, depending upon the size of the check and the frequency of the act. NRS 205.130. On the civil side, certain penalties attach, as well. Regardless of intentionality, issuing a bad check or using an invalid debit or credit card creates a liability to repay the payee/issuer/creditor the full amount charged, plus damages equal to three times the charged amount (subject to a minimum damages award of $100 and a maximum of $500). NRS 41.620. A seller who has received a bad check may also charge the drawer an additional fee of $25 per check. NRS 597.960.