On July 22, the Governor of New Jersey signed into law A 3861 (the “Act), also known as the Louisa Carman Medical Debt Relief Act, which codified the protection of consumers from “predatory medical debt collectors,” including by prohibiting certain credit reporting of medical debts. Section 3 of the Act prohibits medical debt collectors from reporting a patient’s medical debt to any consumer reporting agency for health care services performed on or after the effective date. Section 3 also prohibits consumer reporting agencies from including a patient’s paid medical debt or outstanding medical debt of less than $500. The provisions of Section 3 went into immediate effect upon approval of the bill.

Section 5 of the Act prohibits a medical debt collector from charging an interest rate of more than 3 percent per year, garnishing the wages of someone who makes less than six times the federal poverty level to collect any owed medical debts, or placing a lien on an individual’s primary residence or personal property to collect medical debt owed by that person. The provisions of section 5 of the Act will go into effect one year following enactment: July 22, 2025.

New Jersey became the latest state to bar consumer reporting agencies from including a patient’s medical debt in credit reports, following Connecticut (here) and New York (here).