North Carolina Debt Collection Laws: Your Rights and Protections
North Carolina's three state debt collection laws, combined with federal FDCPA protections, give you strong rights against abusive collectors. The statute of limitations for credit card and medical debt is three years. If a debt collector breaks the law, you can file complaints or sue for damages up to $4,000 per violation.
Answer Your LawsuitNorth Carolina has three strong debt collection laws that protect you. These laws work together with federal protections to stop abusive debt collectors. The statute of limitations for credit card debt and medical bills is three years in North Carolina.
What Are the Debt Collection Laws in North Carolina?
North Carolina has three important state laws that regulate debt collectors:
Being Sued by a Debt Collector in North Carolina?
You have only 30 days to respond to avoid losing by default. Our partner Solo has helped thousands answer debt lawsuits and negotiate better settlements.
Respond to Your Lawsuit- North Carolina Collection Agency Act (outlined in Section 58-70 of the NC General Statutes)
- North Carolina Debt Collection Act (outlined in Section 75-50)
- Consumer Economic Protection Act of 2009
North Carolinians also have protection from the federal Fair Debt Collection Practices Act (FDCPA).
How Do North Carolina’s Laws Protect You Against Debt Collectors?
The three state laws provide important protections against abusive collection practices.
The North Carolina Collection Agency Act (CCA)
Under the North Carolina Collection Agency Act, debt collectors are prohibited from:
- Threatening you with arrest or damage to your reputation
- Harassing or abusing you with profane language or excessive calls
- Publicizing your debt by talking about it with third parties
- Misleading or deceiving you about who they are or what you owe
- Using unfair practices like charging illegal fees
The CCA regulates third-party debt collection agencies collecting consumer debt. Unlike many other states’ laws, the CCA also applies to commercial debt. The law requires third-party collection agencies to register with the state.
The law doesn’t apply to law firms handling their own collections. However, if a debt collector hired a lawyer, both must follow the CCA.
The North Carolina Debt Collection Act (DCA)
The North Carolina Debt Collection Act is similar to the CCA. But it has one important difference: It also applies to original creditors. The DCA extends protections to anyone collecting consumer debt.
Under the DCA, debt collectors can’t use:
- Threats and coercion
- Harassment
- Unreasonable publication of your debt to third parties
- Deceptive representation or misrepresentation
- Unconscionable or unfair practices
The Consumer Economic Protection Act of 2009
When debt collectors don’t get their way, they often turn to the courts. The law requires debt collectors to give you a 30-day written notice before filing a lawsuit.
Why does the notice matter? If you get sued in North Carolina, you only have 30 days to respond. If you don’t respond, you’ll probably lose the case by default. You can respond to the lawsuit without hiring a lawyer. Many people don’t respond because they don’t know what to do. The state law gives you a heads-up about potential lawsuits. You get more time to dispute the debt or try to settle for less.
The law spells out exactly what debt collectors must include with a lawsuit. They must prove you owe the debt and that they legally own it. Many other states don’t include such clear rules. North Carolina’s requirements make it harder for debt collectors to win default judgments without proper proof.
How Does the Federal FDCPA Protect You?
In addition to state laws, you’re also protected by the federal FDCPA.
The FDCPA gives consumers certain rights in the debt collection process. Debt collectors must:
- Send you a validation notice within five days of first contact
- Identify themselves as debt collectors
- Stop contacting you if you request it in writing
- Only contact you during reasonable hours (8 a.m. to 9 p.m.)
The FDCPA prohibits debt collectors from:
- Harassing, oppressing, or abusing you
- Making false or misleading representations
- Using unfair practices to collect debt
- Contacting you at work if you tell them not to
- Discussing your debt with third parties
What Can You Do if a Debt Collector Breaks the Law in North Carolina?
If a debt collector violated your rights, you can fight back. You can file a complaint or even bring a lawsuit to recover damages.
File a Complaint
The North Carolina Attorney General enforces the state’s debt collection laws. If you’ve experienced bad behavior from a debt collector, you can file a complaint online with the attorney general.
You can also file a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB helps enforce the FDCPA at the federal level.
File a Lawsuit
Under North Carolina law, you have the right to sue debt collectors. You can bring your lawsuit in a local state court. If you win your case, you can recover actual damages and statutory damages of $500 to $4,000 per violation.
If you hire a lawyer to help with your case, you can also request attorney fees. The judge will decide whether to grant this request.
You can also sue third-party debt collectors in federal court for FDCPA violations. If you win your case, you’re eligible for actual damages and statutory damages up to $1,000.
What Is the Statute of Limitations for Debt Collection in North Carolina?
Debt collectors can’t try to collect on a debt indefinitely. The statute of limitations limits how long debt collectors have to sue you. In North Carolina, the statute of limitations is:
- Three years for credit card debt, medical debt, and other open accounts
- Four years for contracts of sale (like auto loans)
- 10 years for mortgages
It’s important to know the statute of limitations. A statute of limitations defense is strong if you get sued for old debt. In some cases, you can accidentally restart the statute of limitations. If you agree you owe the debt or make a payment, the clock may restart. The creditor gets even more time to sue you.
Be careful if you get contacted about a debt that’s a few years old. Assert your rights before giving any information. Ask the debt collector to send you a debt validation letter.
You can also send a debt verification letter to ask for more details. Ask whether the debt is past the statute of limitations. The debt collector may not be legally obligated to answer. But it’s worth asking, and it shows you know your rights.
What Can Debt Collectors Do To Collect Debt in North Carolina?
There are legal limits to what debt collectors can do. But they still have a lot of leeway when collecting a debt.
Debt collectors can call you, send notices, and contact you on social media. These efforts will likely continue for a few months before they escalate. If there’s no resolution, it’s common for debt collectors to take people to court.
Unfortunately, it’s also common for people to ignore lawsuit papers. You may hope the case will go away. But ignoring it usually means you lose by default. The debt collector gets access to new tactics. With a court order in hand, debt collectors can:
- Garnish your paycheck (though they can’t take it all)
- Take money from your bank account (bank levy)
- Place a lien on your property
If you’re being pursued for an auto loan debt, you’re at risk of repossession. In North Carolina, lenders can repossess your car without a court order. Repossession happens as soon as you default on your loan.
The most important thing you can do is respond to the lawsuit within 30 days. If you need help responding but can’t afford a lawyer, consider using our partner Solo. They’ve helped thousands respond to debt lawsuits and settle debts for less.
Need Help With Debt Relief? Here Are Some Options
Dealing with debt collectors is stressful. Dealing with debt is stressful. But you don’t have to do this alone. If you want to take control of your debt, consider setting up a free meeting at an accredited credit counseling agency. Credit counselors are trained professionals who help people make a plan.
They can help you streamline your monthly payments. They can negotiate lower interest rates with your creditors through a debt management plan. If your debt is overwhelming, they may suggest filing bankruptcy to get a fresh start. Our partner Cambridge Credit Counseling can help you explore your options.
If you need legal assistance but can’t afford a lawyer, try contacting Legal Aid of North Carolina.