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REPORT: NJ Puts Families at Risk to Feed an Insatiable Debt Collection Machine

November 12, 2019

National Consumer Law Center’s 50-State Review: New Jersey Receives an F Rating; Consumer Protections from Debt Collectors Need Major Reform


Highland Park, NJ – A new report from the National Consumer Law Center surveying exemption laws that protect consumers’ wages, assets in a bank account, and property from seizure by debt collectors gives New Jersey an “F” for extremely weak protections. No Fresh Start in 2019: How States Still Let Debt Collectors Push Families into Poverty surveyed the laws of 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands and found that not one jurisdiction’s laws meet basic standards so that debtors can continue to work productively to support themselves and their families.

“Not having pro-consumer debt protection laws can cause families to have to seek debt relief and bankruptcy relief potentially sooner than states that have consumer debt protection laws”, stated Ben Tejes, Co-Founder and CEO of Ascend Finance which focuses on providing information to help consumers decide between bankruptcy and debt settlement.

State grades are determined using five elements; protection of a living wage, the home, a car, a basic amount in a bank account, and household goods. New Jersey received an overall failing grade, with an “F” for extremely weak protections of homes, automobiles, bank accounts, and household goods, and a “D” for weak protections of wages. The astronomic growth of the debt industry has left families across New Jersey increasingly vulnerable to seizure of essential wages and property to pay their oldest debts, even as the state struggles to recover from the Great Recession of 2008.

“We are deeply concerned that the NCLC report found New Jersey law fails to prevent creditors from pushing people to the point where they cannot take care of basic needs for themselves and their families,” said Beverly Brown Ruggia, Financial Justice Organizer of New Jersey Citizen Action.  “We do applaud New Jersey Attorney General Grewal’s actions on the debt industry against bad actors, and the millions of dollars in debt relief his office has secured for many New Jersey consumers through settlement agreements. But we urge the Murphy administration and the State Legislature to take a good look at the report’s recommendations and to make appropriate reforms to New Jersey policies and law.”

“This report serves as a wake-up call for states to update their exempt property laws and stop putting millions of families at risk,’” said Carolyn Carter, National Consumer Law Center deputy director and author of the report. “Doing so will allow local courts to redirect their focus from the insatiable appetite of a debt machine that churns out millions of undocumented debt collection lawsuits each year,”

Key Recommendations

The NCLC report recommends that state exemption laws should be reformed to:

  •    Preserve the debtor’s ability to work
  •    Protect the family’s housing, necessary household goods, and means of transportation.
  •    Protect a living wage for working debtors
  •    Protect a reasonable amount of money in a bank account 
  •    Protect retirees from destitution
  •    Be automatically updated for inflation.
  •    Close loopholes that enable some lenders to evade exemption laws. 

By updating its exemption laws, New Jersey can prevent over-aggressive debt collectors from reducing families to poverty. These protections also benefit the state by keeping workers in the workforce, helping families stay together, and reducing the demand on funds for unemployment compensation and social services.

“At a time when so many New Jerseyans are struggling to make ends meet and they have so much medical, student and other forms of debt, it is essential that the state do everything to protect them from  abusive collection practices that can push them into the street,” said Brown Ruggia.


New Jersey Citizen Action is a statewide advocacy and social service organization that fights for social, racial and economic justice for all while also meeting the pressing needs of low and moderate income New Jerseyans through education and direct service.

Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has worked for consumer justice and economic security for low-income and other disadvantaged people in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.