Debt Law North Carolina | King Law Firm (2024)

FAQs

What is North Carolina law on debt collection? ›

Debt collectors are allowed to contact you:

In person, by mail, by telephone and by fax about the bills you owe. At home, between the hours of 8 a.m. and 9 p.m. At work. It is legal for debt collectors to contact you on the job unless they have a telephone number to reach you during non-working hours.

North Carolina Resident Debt Relief. InCharge provides free, nonprofit credit counseling and debt management programs to North Carolina residents. If you live in North Carolina and need help paying off your credit card debt, InCharge can help you.

The statute of limitations on debt in North Carolina is three years, according to N.C.G.S. § 1-52 (1). If your creditors want to sue you over unpaid debts, they have three years from when you defaulted on the debt .

In North Carolina, the statute of limitations for debt is three years from the last activity on your account. That is how much time a debt collector has to file a lawsuit to recover the debt through the court system,. It's one of the shortest such limits in the country.

Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.

On November 30, 2021, the Debt Collection Rule became effective. The rule clarifies how debt collectors can communicate with you, including what information they're required to provide you.

If you have unpaid bills in collections, a debt collector could file a lawsuit against you to collect the debt. This will hurt your credit score, but it could also lead to seized wages or a lien on your home.

Pros of debt settlement programs include speeding up the repayment process, reducing the total amount owed, and avoiding lawsuits. Cons involve a negative impact on credit score, accumulation of late fees and interest charges, and results that can't be guaranteed.

If you're one of the millions of Americans struggling to repay high-interest debt, a debt relief plan may be an option to help you get your finances on track. But it's not a quick fix. It's a long-term solution designed to help you get out of debt over a period of time — typically several years.

If there is no agreement, the winning party can begin the collections process. The clerk of superior court will record the judgment, and interest will begin to accrue if it is not paid.

How long does it take for a debt to be uncollectible? ›

The law does not eliminate the debt, it merely limits the time frame that a creditor or collection agency has to take legal action to collect it. The time frame varies from state-to-state but is generally 3-6 years.

§ 18C‑134. Setoff for debt collection against lottery prizes. (a) Purpose. – The Commission must establish a debt set‑off program by which lottery prize payments may be used to satisfy a debt owed or collected by a claimant agency that is at least fifty dollars ($50.00).

North Carolina General Statute § 58-70-115 states that no collection agency shall collect or attempt to collect any debt by use of any unfair practices.

Although the debt won't be factored into your credit score after seven years, there are still consequences. When you stop paying your debt, the creditor will start charging late fees and interest will continue to accumulate, increasing the balance you owe.

If you ignore your summons, the court is likely to rule in the debt collector's favor and your wages could be garnished until you pay back the amount of money that the court rules you owe.

However, laws in North Carolina protect consumers from wage garnishment. Most unsecured debts in North Carolina, such as medical bills and credit card debt, cannot be garnished from your paycheck. However, a creditor can put a lien on your property or levy your bank account.

In North Carolina, there are many statutory and common law protections in place that help a debtor keep their wages and property, even in the face of claims by credit card companies or other creditors. North Carolina has stringent restrictions on wage garnishment, about which you can learn here.

Creditors can sue you if you fail to pay your credit card debt. If they win their case, a court will issue a judgment against you which gives the creditor the ability to file a lien in the public records.

Ignoring or avoiding a debt collector is unlikely to make the debt collector stop contacting you. If you believe you do not owe the debt, you should tell the debt collector. If the debt is yours and you can't afford to pay it, you may be able to decide with the debt collector.