North Carolina Debt Collection Laws

While every consumer who has contracted for repayment of a debt has the obligation, by law, to pay that debt, that does not mean their creditors have the right to abuse, harass, or act unethically in their efforts to recover that debt. That is why there are federal laws prohibiting such harsh and unfair actions, primarily in the form of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Some individual states have also enacted laws reinforcing and expanding those statutes. However, there is relief available to those who desire to pay their debts and get out of financial trouble if they will consult an experienced debt relief attorney to guide them through the recovery process and avoid collection agencies altogether.

Debt Collection North Carolina

The state of North Carolina has enacted statutes that, in essence, mirror and support the federal laws protecting citizens from abuse and harassment by debt collection agencies. There are some additional statutes that North Carolina enforces in this area, as well. In addition, those seeking relief from such abuse can contact the state Attorney General’s office or a local district attorney. If the state finds such abuse occurred, the victim in North Carolina may be awarded compensation and, in some cases, damages.

North Carolina Statute of Limitations

  • The statute of limitations in North Carolina for filing lawsuits concerning non-payment of oral and written contracts, as well as open accounts is 3 years
  • The statute of limitations for promissory notes is 5 years

Collections Practices and Rules for North Carolina

North Carolina’s debt collection protection laws generally mirror the federal statutes. However, in addition to those laws, North Carolina requires debt collectors, debt collection agents, and debt collection agencies to be licensed and bonded by the state. Any agency failing to comply can be charged with a felony.

Legal Collections Actions

Creditors may pursue payment from their debtors through normal contact methods, such as mail, phone, or fax. In addition, they may assign debts to collection agents or agencies to pursue those past due debts or default accounts through any legal means.

Illegal Collections Actions

  • Any form or coercion, threat of violence, violence, false threats or accusations, threatening to sell, assign, or refer a collection in such a way such as to deny the consumer appropriate defense or result in treatment that is harsh or abusive
  • Misrepresentation or deception that claims a law enforcement or government official is involved when they are not, in fact, a part of the process
  • Threatening garnishment or assignment of wages when such actions are not legal or planned
  • Harassment, profanity, repeated calls, or calls at inappropriate times or locations
  • Attempting to contact a borrower at their workplace when the debt collector has been informed that such contact is prohibited by their employer unless there is no other way to contact the consumer during nonworking periods
  • Revealing or threatening to reveal the consumer’s credit status with anyone other than the debtor, their spouse, or their attorney without permission or through bona fide legal processes
  • Falsely threatening to increase debts by fees and interest charges that are not authorized by the court or the original contract
  • Seeking or obtaining any admission that a debt is valid by a debtor legally declared bankrupt, or of any debt past the statute of limitations, or a waiver of legal rights
  • Contacting a consumer when the collection agency has been informed that the consumer is represented by an attorney

Laws for Debt Harassment in North Carolina

North Carolina and federal statutes both state that any form of harassment for debt collection purposes is illegal.

North Carolina Debt Negotiation and Settlement Rules

In addition to the laws against improper debt collection processes, there are laws against fraud in both North Carolina and federal statutes. As a result, those debt negotiation and settlement companies that charge high fees and make enticing promises but fail to fulfill their contracts are illegal.

There are reputable companies that may be able to negotiate with creditors to reduce debt and help the consumer pay it off; however, they cannot perform some of the legal functions that may be required. A debt settlement attorney can provide the protection, guidance, and representation a consumer needs, even representing them in civil cases against unscrupulous debt negotiation companies who have taken advantage of them.

Help from a North Carolina Debt Collection Attorney

There are many who hope to manage their own debt collection problems, even when they are nearing or already in default on claims or payments. Sadly, all too often they end up in worse trouble than they started in, being inadequate to understand and fulfill all the requirements of these complex financial and legal issues. However, there are skilled attorneys who can help, supporting, and guiding debtors to eventual financial freedom and credit recovery.

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