North Carolina Debt Collection Laws
North Carolina recently enacted new legislation, Senate Bill 974 that changes debt collection practices statewide.
Lawsuits and Arbitration on Time-Barred Debt
The new bill would prevent a collection agency in North Carolina from bringing suit, initiating arbitration or attempting to collect a debt when the debt collector knows or should know that the debt is past the statute of limitations. This does not prevent the collector from sending letters or placing phone calls since those activities are not prohibited under the statute of limitations.
Restrictions on Debt Collection
The bill also prevents a debt collector from bringing suit, initiating arbitration, or attempting to collect a debt without first having:
- Valid documentation of the owner of the specific debt; and
- Reasonable verification of the amount of the debt allegedly owed
Requirements for Filing Suit
In order to file suit, a North Carolina debt collector must first give the consumer a written notice of intent at least 30 days prior to the filing. This notice must contain the amounts owed and proof of ownership of the debt. In addition, the debt collector’s license number must also be included.
Penalties for Debt Collectors in North Carolina
The new North Carolina Senate Bill 974 will also increase the penalties paid by debt collectors for violations of the law to equal no less than $500 and no more than $4,000 per violation.
How long is the statute of limitations on collection of debts in North Carolina? I was told 3 years. I am particularly interested in consumer or credit card accounts that might be pursued by third parties or original creditors.
Ed Crawford
March 28, 2010
The statute of limitations in North Carolina to file a lawsuit for breach of contract is three years from the date the contract was breached. Normally, a credit card account will fall under this category because there is a written agreement which governs the terms of use and billing for the account. The date of breach would be the date the first payment was not made when it came due. However, if a payment is made before the three years are up, this will normally re-start the three-year limitations period. Please understand there are many variables which can affect the limitations period, so I would seek the advice of a lawyer to determine how it applies to your particular situation. If you are being contacted regarding a debt that you think is beyond the statute of limitations, click to speak to an attorney for a FREE consultation to see if you have a case.
stopdebtcollectors
March 29, 2010